Tanox, Inc., Novartis Pharma AG, an affiliate of Novartis AG and Genentech, Inc. announced that they have settled all litigation among them and finalized the detailed terms of their three-party collaboration, begun in 1996, to develop and commercialize certain anti-IgE antibodies including Xolair (omalizumab) and TNX-901.

The following details of the settlement were disclosed: Genentech and Novartis will each reimburse Tanox $3.3 million for a portion of its TNX-901 development costs; Tanox will relinquish any rights to manufacture Xolair and, in exchange, will receive payments tied to the quantity of Xolair produced; and Tanox will benefit from an accelerated forgiveness of a loan to finance the construction of its biologics manufacturing plant in the mid-1990s.

As in the original agreement, Genentech and Novartis share US marketing rights for all collaboration products, while Novartis has marketing rights outside the US The existing royalty and profit-sharing percentages will remain unchanged. Committees with representatives from all three companies have been established to cooperatively oversee further development and commercialization of Xolair, and possibly other collaboration products.

"We are pleased to end the disputes with respect to Xolair and TNX-901 and look forward to working with Genentech and Novartis to further develop and support anti-IgE therapy for asthma and allergy," said Nancy Chang, CEO of Tanox.

The partners are committed to developing Xolair as the lead antibody for peanut allergy. An Investigational New Drug (IND) application for Xolair in this indication was filed with the US Food and Drug Administration (FDA) in November 2003. Patient enrollment in a Phase II proof of concept clinical trial is expected to begin early this year.