Good afternoon, ladies and gentlemen, and welcome to the XOMA Corporation’s Corporate Update and First Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this call is being recorded. I would now like to turn the conference over to your host for today, Ashleigh Barreto, Investor Relations at XOMA. You may begin.

Thank you, operator, and good afternoon, everyone. Joining us on the call today are John Varian, Chief Executive Officer; Paul Rubin, Senior Vice President, Research and Development, and Chief Medical Officer; and Fred Kurland, Vice President, Finance, and Chief Financial Officer. Before we begin, I’d like to remind everyone that this conference call will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. And we undertake no obligation to revise or publicly release results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause our actual results to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and other SEC filings. I’d now like to turn the call over to Fred.

Thank you, Ashleigh, and good afternoon everyone, and thanks for attending our call. For the three months ended March 31, 2014 we recorded total revenues of $3.4 million, compared with $9.5 million during the corresponding period of 2013. The revenues for the first quarter of 2014 reflects $6.1 million and lower reimbursements from SERVIER, compared to a year ago. There are two reasons for this. First, recall that under our agreement SERVIER paid the first $50 million of all non-infectious uveitis development cost, after which all cost would be shared equally between the two partners. We reached that $50 million spending levels during the third quarter of 2013, since that time each partner has incurred non-infectious uveitis costs that are approximately equal to each other, resulting in a reduction in reimbursements from SERVIER. Second, during the first quarter of 2013, we received a one time funding milestone payment of $3.9 million from SERVIER related to a product development program that we subsequently transferred to Symplmed. Our first quarter 2014 research and development expenses were $21.5 million compared to $16.6 million in the corresponding 2013 period. The first three months of this year had higher cost associated with gevokizumab clinical and other development activities, increased spending on pre-clinical development activities related to the XMet platform and $2.4 million in non-cash stock based compensation expense. Our selling, general and administrative expenses were $5.3 million and $4.1 million in for the 2014 and 2013 first quarters respectively. The increase primarily reflects an increase in charge for non-cash stock based compensation of $1.5 million. For the first quarter ended March 31, 2014, XOMA had a net loss of $4.7 million or $0.04 per share, which included a $20 million gain in the non-cash revaluation of contingent warrant liabilities, excluding the revaluation, our net loss…

Thank you, Fred. I would like to thank everyone for joining us today. This is an incredibly exciting time for us here at XOMA. We are very near to having the first data from our Phase 3 studies and our lead indication non-infectious uveitis. We also have a clear path forward in our next pivotal indication for gevokizumab, pyoderma gangrenosum. Before I touch on these near-term events, let me start with some of our other clinical efforts. You are well aware of the challenge we’ve been facing with enrollment in the EYEGUARD A and C studies. All the companies working in this indication have had similar difficulties. In our continuing effort to learn and adapt, we’ve launched a new push known as the EYEGUARD-C initiative. This most recent drive came about because in U.S. we were seeing steadily increasing and apparently predictable enrollment in EYEGUARD-C through February of this year. In March, we saw a slowdown in activity. EYEGUARD-C enrollment in the U.S. is the area on which XOMA can have the most direct impact. Patients with active disease who quality for EYEGUARD-A are harder to find in the U.S. as our investigators have to quote, “wait for them to show up”, with a qualifying vitreous haze score. These patients are rare here in the U.S. Now EYEGUARD-C is a different story, since we’re looking for patients who have NIU but are controlled corticosteroids. These patients exist and can be accessed at our 60 plus U.S. clinical site. Our investigators just have to continue to find them and enroll them in EYEGUARD-C. We put our EYEGUARD-C initiative in place based on a simple premise, if each of our open U.S. centers can find us approximately one more patient, we can at least hit our U.S. enrollment target fairly soon. We…

Thanks, John. And good afternoon, everyone. I am going to review the primary end point for EYEGUARD-B and provide with a statistical powering assumptions. Then I’ll give you an update of our plans for pyoderma gangrenosum and our progress related to XMetD, a compound which blocks the action of insulin and its receptor. And let you know about the presentations we’re going to make in the coming months that maybe of interest to you. EYEGUARD-B is being conducted exclusively in uveitis patients with underlying Behçet’s disease and are being treated with oral corticosteroids. It’s design to compare the difference in the time to first acute ocular exacerbation between the gevokizumab and placebo arms. Patients being treated with prednisone 20 milligrams per day or an equivalent steroid and our randomized one-to-one to receive either gevokizumab 60 milligram subcutaneously once monthly oral placebo. After dosing these patients have their steroids tapered in a consistence step wise approach down to 5 milligrams per day using the jobs protocol. The study is designed to analyze the primary end point after a pre-specified number of initial exacerbations have occurred in the study. Now it’s important to understand how the protocol to find in exacerbation. EYEGUARD-B defines an exacerbation as a worsening in Vitreous Haze with or without two year Behçet's involvement by two units and its front scale or a 15 or greater later ETDRS decrease in best collected visual acuity score that is not explained by a cause other than ocular information secondary to disease or the emergence of new retinal infiltrates or acute retinal vasculaters. Now I’ll explain the statistical assumptions for this portion of the EYEGUARD-B study. Power assumptions for EYEGUARD-B will derive from the review of the literature and in console patients with the Type 2 diabetes key opinion leaders on…

Thanks, Paul. Before we take questions I’d be remiss if I didn’t address Dr. Servier’s passing. We have a very strong connections with SERVIER and very much feel part of an extended family. We are on regular contact with people and highest levels of the organization, particularly Dr. Emmanuel Canet and Pascal Touchon both of whom sit on the executive committee. We do not know the succession plan for leadership at this point, but we know gevokizumab is one of the company’s highest priorities and they have communicated this to us. Dr. Servier had a foresight to plan for the long-term durability of SERVIER as a company. In the 1980s he organized the company as a research foundation and all the company’s profits are reinvested. His passing will not create a change of control event. The research foundation will continue to own SERVIER, the company. Dr. Servier was an extraordinary man who dedicated his life to pursuing his passion to improve human health. With that said, Operator we’ll be glad to take questions.

(Operator Instructions) Our first question comes from Ted Tenthoff of Piper Jaffray. Ted Tenthoff – Piper Jaffray & Co : Very much for the – I appreciate it. A question regarding EYEGUARD-B stand down, I appreciate the clarity that you’ve given with respect to the enrollment plans for AMC. Can you give us any clearer detail on when we should be expecting data some of the Behçet's study and I’ll leave at that.

From EYEGUARD-B, the ships, the other studies that’s what you’re asking Ted? Ted Tenthoff – Piper Jaffray & Co : Yes.

Okay. Yeah, so to be clear, SERVIER expects the final exacerbation to happen in June, and they have indicated to us which we appreciate them being as clear as they have that it will take them about six weeks or so, they’ve given us the schedule of how long it would take to them deliver the results to us and then immediately to you. There’s actually a very good chance to be part of that data analysis. The XOMA team part of that also, we intend to. So, that’s just clear as we can be. And just one thing to say, there’s a prediction about when the last exacerbation will happen. It’s based upon number that have happened so far and rate of expectations for the remainder. So, it will happen when it happens. And we what the events to fall as they should between the placebo and the treatment groups and so when the event happens, again, they’ve indicated to us it will be about six weeks and again, we appreciate them giving us at least an indication of how long they think it would take, because it’s important for you and investors to have an idea of soon we can deliver that result.

Our next question comes from Ritu Baral with Canaccord Genuity. Ritu Baral – Canaccord Genuity: Hi, guys. Thanks for taking the question. About enrollment in CMA, are you definitely telling us that this is a function of identifying the patients rather than patients not opting into the studies for whatever reason? And can you give us any clarity as to the enrollment rate as far as patients per center needed, going forward?

Let me answer the first question. We – there is a couple of elements that kind of demanded that we design the study a certain way. And part of that was the regulatory requirements, especially for EYEGUARD-A. And even in EYEGUARD-C, there were certainly regulatory requirements from EMA that made us design it in a certain way. Having said that, we think that the way that we did design it should demand that the data should be of a much better quality at the end. We have adequate opportunity to liberalize the entry criteria, as other companies have done, but we have not done that because we want to make sure that at the end of the day we get a true signal for the drug when we analyze the data. So the patients exist. That’s not the issue. But the type of patients we need for the study – we want to make sure that they meet the qualifications that do ensure that we get a good result at the end of the day. So it’s – we’re conservative in that, but I think we’ll get better data. Also, for EYEGUARD-A and C, there are competitive trials that have been going on. So we’re not the only game in town. And that does affect, at least in part, the enrollment rate, and that’s not true for the Behçet’s uveitis. Wherein Behçet’s uveitis, we’re the only study that’s being performed in the majority in these centers. So you might ask why is EYEGUARD Behçet’s fewer patients enrolling quicker, I think part of that relates to that fact that we’re the only options in terms of – from a clinical trial for majority of these centers. So, as John said, well, we’re not giving you the numbers, what we’re trying to get out of our initiative, is just one additional patient per center. Ritu Baral – Canaccord Genuity: Okay.

And if we can do again, we’re not being exactly specific, but what we have said, is that if we can get about one per center here in the U.S., in these next few months, we’ll be okay in U.S., right. So, not to be too specific, but it’s not that big of hurdle we think. We look at it and say, can each center deliver us one patient and by going out and actually again I was in North Carolina yesterday meeting with the extremely good investigator and just spending the time with them and talking about ways to find their extra one or two patients for each of the center that we go out and talk – that we go out and talk to, it’s a very doable thing. So, file a station, getting them enrolled its not that you know, its an effort, but its not that big of amount for us to climb. So, we’re really focused on getting this done.

Yeah, I mentioned and John alluded to the fact that this is difficult study to enroll. Its partially related to – it can enroll something like diabetes or asthma or even rheumatoid arthritis. There are sites that are essential professional study sites and they do this predominantly for the money that they get, the remuneration. In this case, these physicians are doing it because they truly see a need for their patients and they only can find this one or two at a time. They don’t have stables of patients that exist with this disease. Ritu Baral – Canaccord Genuity: Got it. And can you remind us again what the breakout in enrollment is between U.S. and ex-U.S.?

So, remember said – yeah, we never said quite directly, but let me just give you some guidance on what we have said. Each A&C has to enroll 300 patients to be done, okay. What we’ve said is that the US for EYEGUARD C should be about or at least half of that is what we will be targeting. For EYEGUARD A, we know we will not be able to get 50% of the 300 patients out of US or even more dependent on SERVIER. And it’s not that we have disclosed it, we actually – we are working hard to actually get it done. And don’t know the final break down. We just know SERVIER will need to be more successful in EYEGUARD A, but we can’t be in US just because you don’t see patients walking into these physician’s office that often who have vitreous haze score of two plus. Ritu Baral – Canaccord Genuity: Understood. And turning to EYEGUARD, Paul, what would you say are the most important secondary endpoint of that trial? What will you be watching more closely?

Well, there is a couple of things. The primary endpoint, as I described, so you understand that is the rate, or the time to exacerbation. Now interestingly we can enroll patients that aren’t completely quiescent. They just have to be shown to be improving at the time they enroll. So, in fact, we will be able to capture patient improvement as well as just lack of exacerbation. So we will be able to see improvements in things like best corrective visual acuity and if they have – well probably visual acuity. If they had any interior chamber cells, we will be able to capture that, improvement in those things. And even improvement in vitreous haze scores. Ritu Baral – Canaccord Genuity: Got it. Thanks for taking the questions.

Thank you.

Our next question comes from Jason Kantor with Credit Suisse Jason Kantor – Credit Suisse : Hi. Thanks for taking my question. You previously talked about a Behçet-only bio link strategy, where you can start another Behçet study. I mean, do you still think that you could initiate that study and complete it before you completed A and/or C is that still your thought process here, or are you waiting to start that study, and so you get some sense of how A and C are push, actually I love to compare that.

I think, that certainly the magnitude of the study that we intend to do is on a relative scale is not very quick. So, our plan is to initiate that trial as soon as we could get it going. To give us the option of submitting, there should be any additional voice in either of the other trials. So, this gives us flexibility in terms of submitting the BLA should either be – we continue, or we see some additional hurdles and getting this complete, or the one that’s positive takes a little bit longer than we thought it might. Yeah, so we’ll start it sooner or rather than later and just to say, Jason, what the clinical team has been doing is exactly the right thing, which is there are certain investigators here in the U.S. for the key to being able to get this small U.S. study done. What we’ve been doing is actually spending time directly with them to actually have them have some input on the protocol. So, they are going to be willing to and wanting to foot their Behçet’s uveitis patients into our study. So, it’s not a process where we’re sitting around drafting a huge protocol that we’re just going to hand out and see if people like it. We’re working with the four, five, six enters here in the U.S., so we think should be part of this study. We’ll have the patient, but make sure we have a protocol that they want to be part of.

Like we’re spending time now identifying the patients.

Yeah, within their scope. So, it’s – we’re going to get going and it’s important to us to get that up and going and ready. So, we can’t act as quickly as possible as I said to you guys. Jason Kantor – Credit Suisse : And then in terms of, you said you could file this on either A or C, I think when those were first initiated the idea was that you would have A, B & C upon filing, so what was the difference in Central label, which is D&A versus D&C versus all three of them?

Okay. It’s a good question Jason. I think what we’ve said at the very beginning is that we believe that we could submit a EOA with any two of the three trials and at least obviously this is we won’t know until we submit a label and negotiate with FDA, but existing labels for uveitis all they say is for the treatment of non-infectious uveitis. So our assumptions at this point and we have no reason to spec otherwise is with any two to three trials, the label would be comparable to other labels that are being getting.

So just to be very specific with that you may not remember it’s history, but in October two years ago of all FDA when the only two studies we plan to do were EYEGUARD-A and B and got agreement with FDA that A and B would be enough for the broad label non-infectious uveitis treatment, okay. We added see if you remember it was supposed to be just the safety expansion study and we actually turned it into a third pivotal study later on. So the fact that FDA has said to us directly A and B would be enough for the broad NIU indication, makes us very comfortable that any combination of A, B and C would do the same because B would the one you would have the most, we have the most concern about it getting agreement of that counting as one of two.

Our next question comes from Adnan Butt, RBC Capital Markets. Adnan Butt – RBC Capital Markets.: Hi. Good afternoon. Either John or Paul, maybe, for the supplemental Behçet’s study, how many patients do you anticipate and when will you commit to starting that study? Is that as soon as possible time or is it something that you’ll update us on in 2015? And then, secondly, on pyoderma gangrenosum, what’s the comparator, if any, and what’s the primary endpoint for that Phase III and when will it start? Thanks.

The EYEGUARD-B, we haven’t given any specifics on the design, except to say that we believe with a strong EYEGUARD-B study, we really – and that’s what we’re really calling it, a supplemental, although it would be a controlled trial. So we haven’t said the exact number, but the numbers would be smaller than the EYEGUARD-B study. And the intent is to start that as soon as we can. So we’re not going to wait for EYEGUARD-B data even to initiate, which EYEGUARD-B data is coming relatively soon. But the intention is to initiate the supplemental Behçet’s study in the United States as soon as we can execute, and we’ve made a lot of progress in that already. Adnan Butt – RBC Capital Markets.: Okay.

On the pyoderma gangrenosum, as we mentioned, this is a placebo-controlled trial, and the primary endpoint will be numbers of patients whose legion – whose ulcer completely heals after about a four-month period of time. So it will be comparison of the number of responders – response being defined as complete epithelialization or closure of the wound. Adnan Butt – RBC Capital Markets.: So when you say you’re waiting for final FDA signoff, what exactly are you waiting for then?

Well... Adnan Butt – RBC Capital Markets.: It seems you have the design.

Yeah. As we said, we’ve already had a conversation with FDA and we’ve essentially come to agreement as to what the study should look like. But we are putting together the final protocol exactly to what was discussed and we just starting to get their final seal at approval before we initiate. So we don’t anticipate any significant input but we don’t want to initiate until they’ve seen the final protocol.

Yes, this is completely the normal process where we ask for input we’ve got the input we’ve now put together protocols that we think incorporate all that input into agreement from the conversations. But if they have any last little tweaks like that we would like to know that before we finalize it. And...

Because these are pivotal programs. Adnan Butt – RBC Capital Markets.: Okay, thanks everyone.

You’re welcome.

Our next question comes from Biren Amin with Jefferies. Biren Amin – Jefferies & Company, Inc. : Yeah, thanks for taking my questions. I guess on pyoderma gangrenosum Phase III, I understand placebo controlled but will patients be allowed rescue therapy on steroids or will they be on background steroid medications for the Brovana trial?

So they can be on background medication provided that they clearly have active and inflammatory pyoderma gangrenosum while on their therapy and their dose has not changed for a prescribed period of time. So they – the only additional to their therapy while they have active disease demonstrated active disease is the additional chapter. So if their therapy changes either way then they would essentially be not a valuable going forward. Okay. Biren Amin – Jefferies & Company, Inc. : And Paul I guess you know once you start the Phase 3 how long does the company anticipate in fully enrolling?

Yeah, it’s a really good question and it’s hard to know. We entered our proof-of-concept trial actually faster than our initial expectations. But we’ll know – we’ll be able to predict that once we get some history, but we are intending to put quite a few centers as part of this trial where, again, we’re not looking for more than a couple of patients per center, one or two. And as soon as we get some history in enrollment we could better predict. So – but we would be guessing at this point, no one’s ever done a large study in pyoderma gangrenosum. But we’re going to be as aggressive as we can to getting it set up. We’re going to be able to communicate as quickly as we can what the enrollment rate looks like. But for us to predict today, we would be guessing. So – and we’re just not doing that. Biren Amin – Jefferies & Company, Inc. : Okay. And may be if I could ask on the EYEGUARD studies, as I understand EYEGUARD-A, you said that you’re aligned on SERVIER for ex-U.S. enrollment. As you probably know that at ARVO or the SAKURA trial there was a poster on and I think they – in that study they enrolled about a 100 patients or slight above 100 from India out of the 350 patients. So given like the mass of exposure of Indian size, have you thought about opening up sites in India to potentially expedite enrollment?

So that’s – SERVIER would have to agree to that. And there’s good reason that they would prefer not to open sites in India. And – so I’d say the odds are very low that we would do that so... Biren Amin – Jefferies & Company, Inc. : Okay, great. Thanks.

Welcome.

Our next question comes from Matt Kaplan with Ladenburg Thalmann. Matt Kaplan – Ladenburg Thalmann & Co. Inc.: Hi, guys. Thanks for added detail and taking my questions. First, with respect to initiation of the supplemental Behçet’s study, do you plan to wait for the readout of EYEGUARD-B before you start that study and enroll the first patient?

No, we don’t plan to wait. So, we’re already making plans to get these things rolling. Matt Kaplan – Ladenburg Thalmann & Co. Inc.: Okay, very good. And then in terms of ANC I just want to make sure that I understand what you’re telling us in terms of the timing of those. It seems like that we did see you very close to at least getting arms around enrolling the patient that at least the U.S. component. What does that mean and where are we in the Europe – ex-U.S. component and in terms of the timing of the readout of data?

Okay. Thank you. So, you’re right. We’re – if this initiative in the U.S. is successful and its and do we see – if it is, then we would have kind of the U.S. side of the equation pretty well solved. Ex-U.S., the key is those five countries I mentioned that are really crucial to getting the enrollment numbers out. And so those are too early in the process of opening the sites to see if we get bonuses of the patient from those countries. So, we should now fairly assume that we’re feeling more and more in control of our fate in the U.S. Outside the U.S., it’s still to be seen, but we’ve got these key countries coming up which we hope will deliver the patients. So, EYEGUARD-C that’s kind of where we’re. Did I answer your question on that? Matt Kaplan – Ladenburg Thalmann & Co. Inc.: Not really. In terms of EYEGUARD-C if the actually hit what you project and the ultimate site as you expect, are you talking -- I mean when can we get that?

So, all I can say now it’s not likely that we’ll have to meet the end point by the end of this year, because I don’t as much about the results of the EYEGUARD-C initiative in U.S. and I don’t know how those critically those five countries will come up and how strong they’re going to be. So I can’t say that we would hit the end point by the end of this year. But it’s not massively changing. Its just I don’t know enough to give you a new exact date. Matt Kaplan – Ladenburg Thalmann & Co. Inc.: Sure. Okay. And then in terms of similarly, obviously that’s more out of your control because you are dependent on SERVIER. But give us a better sense in terms of timing there?

That one is still I think – that one is still has a chance to done and hit the end point within this year and that’s because again, we should see the impact of these key countries that SERVIER is opening up fairly soon. And just to say, the U.S. is not write-off. We actually wanted the sites that I visited it had three patients in the EYEGUARD-A study. So they do exist, they are just more difficult to find in U.S. So, we’re doing our part in the U.S. Its just we’re even more dependent on SERVIER. That study, the end point is at 56 days, so we still have quite a bit of time within this year to see the results of SERVIER efforts outside the U.S. The R-gate in the country is open, the R-gate and the sites active. And so I think we still have a piece of chance with EYEGUARD-A to get to the end point by the end of this year. Matt Kaplan – Ladenburg Thalmann & Co. Inc.: I guess the question is SERVIER controlling the analysis of both AMC as well as B selects or can you give us a read out of that, those results faster?

Yeah. So, you should assume it would be pretty much the same, because it could be a combination of the two of us. They will have to pull together. Their data will pull together our data and should be that kind of a parallel track. Buy you should assume it will take – will take about the same time to pull together AMC on their behalf as it was for B. So it’s not a bad estimate. Matt Kaplan – Ladenburg Thalmann & Co. Inc.: Okay. And then a question for Paul in terms of – can you give us an update in terms of the proof-of-concept studies that you plan, I think, in syndrome as well, where you stand on those?

I can’t say much except to say that I think all these studies are active in enrolling patients.

Yeah. We shouldn’t say more than that.

I mean, that’s really all we can say.

Yes.

Yeah. They’re all SERVIER studies, but there are patients, I think, all of the above. Matt Kaplan – Ladenburg Thalmann & Co. Inc.: Very good. Thanks for all the added detail.

Yes. Thank you.

And I’m not showing any further questions at this time. I’d like to turn the call back over to John Varian for closing comments.

Thank you, operator, and thanks everyone for joining us. It is really an exciting time for us right now at XOMA. The results from our Phase III study of gevokizumab in EYEGUARD-B, which we’ve been talking about, are right in front of us. In this study, what’s really exciting to us is this is the study in a specific patient population from which we’ve generated our most consistently compelling data. So we can’t wait to get these results on hand, so we can put in place our final clinical, regulatory and our preparatory commercial steps to aggressively pursue that indication. So very exciting time, and we look forward to sharing more data with you as we get them. Thanks very much.

And ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.