[*] indicates that a confidential portion of the text of this agreement has been
omitted.

Exhibit 10.48

FIRST AMENDMENT TO COLLABORATION AGREEMENT

This First Amendment to Collaboration Agreement (this “First Amendment”) is
effective as of February 28, 2007 and is made by and between Takeda
Pharmaceutical Company Limited, a Japanese corporation having offices at 1-1,
Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, Japan (hereinafter “Takeda”); and
XOMA (US) LLC, a Delaware limited liability company having offices at 2910
Seventh Street, Berkeley, California 94710, USA (hereinafter “XOMA”).

BACKGROUND

A. XOMA and Takeda entered into a certain collaboration agreement dated as of
November 1, 2006 (the “Agreement”).

B. XOMA and Takeda wish to amend the Agreement to broaden the relationship as
specified herein.

C. Terms which are defined in the Agreement shall have the same meanings when
used in this First Amendment, unless a different definition is given herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, XOMA and Takeda agree
as follows:

Section 1. Amendments. Pursuant to Section 14.9 of the Agreement,

(a) Section 1.17 of the Agreement is hereby amended and restated in its entirety
to read as follows:

““Chiron Exclusivity Period” shall mean the exclusivity period provided for in
Section 3.2 of the May 26, 2005 Research, Development and Commercialization
Agreement between Chiron Corporation and XOMA (the “Chiron Agreement”). The
Chiron Exclusivity Period expired on February 27, 2007.”;

(b) Section 1.38 of the Agreement is hereby amended and restated in its entirety
to read as follows:

““Field” means any and all uses including but not limited to the diagnosis,
prevention, control or treatment of Cancer.”;

(c) the first sentence of Section 2.1.1 of the Agreement is hereby amended and
restated in its entirety to read as follows:

“The Parties intend to carry out multiple programs in which Takeda and XOMA will
collaborate to identify and characterize Program Antibodies and to carry out the
Research and Development and Manufacturing of Antibody Products that act through
Collaboration Targets for use in the Field (the “Collaboration”), consistent
with the objectives set forth in the applicable Plan(s).”;

--------------------------------------------------------------------------------

(d) Section 2.1.3.2 of the Agreement is hereby replaced in its entirety to read
as follows:

“XOMA agrees that following the Effective Date, the provisions of any new
antibody research and development collaboration agreement between XOMA and a
Third Party, or any modification to any existing such agreement, that provides
for exclusivity as between the parties thereto with respect to matters other
than the specific Target(s) covered thereby (e.g., with respect to the field(s)
of use covered thereby) will not limit, or will expressly exclude, XOMA’s
ability to accept Proposed Targets as Collaboration Targets in accordance with
the explicit terms of this Agreement.”;

(e) the second sentence of Section 2.2.2 of the Agreement, which states:

“During the period [*], Takeda may request XOMA’s consent (which consent shall
not be unreasonably withheld or delayed) to submit additional Proposed Targets
to the Escrow Agent, for consideration as proposed Collaboration Targets by
sending the form attached hereto as Schedule 2.2.2.”

is hereby amended and restated in its entirety to read as follows:

“During the period [*], Takeda may request XOMA’s consent (which consent shall
not be unreasonably withheld or delayed) to submit additional Proposed Targets
to the Escrow Agent, for consideration as proposed Collaboration Targets by
sending the form attached hereto as Schedule 2.2.2.”;

(f) the fifth sentence of Section 2.2.5.1 of the Agreement, which states:

“XOMA may elect to reject such Proposed Target in the event that [*].”

is hereby amended and restated in its entirety to read as follows:

“XOMA may elect to reject such Proposed Target in the event that [*].”;

(g) the following Section is hereby incorporated into the Agreement as
Section 2.2.5.2. Sections 2.2.5.2, 2.2.5.3 and 2.2.5.4 of the Agreement are
hereby renumbered as Sections 2.2.5.3, 2.2.5.4 and 2.2.5.5, accordingly:

“2.2.5.2 On February 26, 2007, XOMA proposed to Takeda that [*] be treated as
the second Collaboration Target for purposes of this Agreement. With this
background, the Parties agree that, notwithstanding anything contained in this
Agreement, as amended by the First Amendment to Collaboration Agreement
effective as of February 28, 2007 (the “First Amendment”), to the contrary:

 

(a) [*] shall be deemed, as of the effective date of the First Amendment, the
second Collaboration Target;

 

-2-

--------------------------------------------------------------------------------

(b) within [*] after the effective date of the First Amendment, the Parties
shall prepare and agree (or conclude that they cannot agree) on an initial R&D
Plan for [*] as the second Collaboration Target, and during the course of such
preparation, counsel for each of the Parties will discuss any intellectual
property rights owned or controlled by any Third Party known to such Party that
relate to [*] and are relevant to the therapeutic Antibodies; and

 

(c) in the event that such initial R&D Plan for [*] as the second Collaboration
Target is not mutually agreed within the said [*] period, then [*] shall lose
its status as a Collaboration Target retroactively as of the effective date of
the First Amendment and, for purposes of Section 7.3.5 (as amended by the First
Amendment), [*] shall be deemed to be a Proposed Target named by Takeda but
rejected by XOMA for reasons other than those set forth in the last paragraph of
Section 7.3.5.”;

(h) Section 7.1 of the Agreement is hereby amended and restated in its entirety
to read as follows:

“Upfront Fees. Takeda shall pay XOMA in cash

 

(a) a non-refundable fee of [*] for the first Proposed Target (“First Upfront
Fee”);

 

(b) a non-refundable fee of [*] as set forth in the First Amendment dated
February 28, 2007 to this Agreement (“Upfront Amendment Fee”); and

 

(c) the following additional non-refundable fees for each respective Proposed
Target becoming a Collaboration Target (each, an “Additional Upfront Fee”):

[*]

The Parties hereto acknowledge that the First Upfront Fee was already paid by
Takeda in cash within [*] of execution of this Agreement by the Parties and that
the first Collaboration Target has been accepted into the Collaboration. Each
Additional Upfront Fee shall be paid in cash within [*] of acceptance by XOMA of
such Collaboration Target for Research and Development in accordance with
Section 2.2.5 hereof.”; and

(i) Section 7.3.5 of the Agreement is hereby amended and restated in its
entirety to read as follows:

[*]

Section 2. Payment of Upfront Amendment Fee. The Upfront Amendment Fee shall be
paid by Takeda in cash within [*] after Takeda’s receiving the invoice sent by
XOMA simultaneously or after the execution of this First Amendment.

Section 3. Reaffirmation of Representations and Warranties. The parties each
reaffirm, effective as of the effective date of this First Amendment, the
various representations and warranties that each party made to the other party
in Article 11 of the Agreement. To the extent that such representations and
warranties were effective as of the Effective Date of the

 

-3-

--------------------------------------------------------------------------------

Agreement, the parties reaffirm such representations and warranties as of the
effective date of this First Amendment. To the extent that such representations
and warranties represent ongoing obligations, the parties furthermore reaffirm
such ongoing obligations to the other party.

Section 4. Press Release. The parties hereby agree to the release of a press
release in the form attached hereto as Exhibit A upon full execution of this
First Amendment and the fact of the execution of this First Amendment, as well
as the terms that are expressly described in such press release, shall be deemed
to be in the public domain. In all other respects, Section 10.4 of the Agreement
shall apply to the terms and conditions of this First Amendment.

Section 5. Effect of Amendment. Together with the Agreement (including all
Schedules thereto), the Agreement and this First Amendment constitute the entire
agreement between the parties in connection with the subject matter thereof and
supersede all prior and contemporaneous agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. Except as expressly
provided for herein, all terms and conditions of the Agreement shall remain in
full force and effect.

Section 6. Governing Law. This First Amendment shall be governed by and
construed in accordance with the laws of the State of California, without
reference to the conflicts of law principles thereof.

Section 7. Counterparts. This First Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

-4-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned parties have agreed to the foregoing as of
the date first written above.

 

TAKEDA PHARMACEUTICAL COMPANY LIMITED By:        Name:   Yasuchika Hasegawa  
Title:   President XOMA (US) LLC By:        Name:   John L. Castello   Title:  
Chairman of the Board, President and Chief Executive Officer

 

-5-

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF PRESS RELEASE

XOMA and Takeda Expand Collaboration for Therapeutic Antibody Discovery and
Development

Berkeley, CA, and Osaka, JAPAN — XOMA Ltd. (NASDAQ: XOMA) and Takeda
Pharmaceutical Company Limited (TSE4502: Takeda) announced today they have
amended their existing agreement to increase the number of potential therapeutic
antibody programs under the collaboration initiated in November of 2006. With
this expansion, XOMA estimates the aggregate upfront, R&D funding, milestone and
other payments could exceed $230 million before royalties over the life of the
agreement. Since entering the original agreement four months ago, XOMA has
received or is otherwise due approximately $8 million as various
collaboration-related payments.

“We are pleased that, in connection with the expiration of certain exclusivity
obligations under an agreement with another entity, we are expanding our
collaboration with Takeda to include additional therapeutic antibody programs in
oncology. XOMA is well positioned to capitalize on the growing demand for
monoclonal antibody solutions and this expanded agreement validates our
strengths in translating targets into therapeutic product candidates and
advancing their development thereafter,” said John L. Castello, chairman of the
board, president and chief executive officer of XOMA.

“Takeda has an extensive collection of cancer-related disease targets that hold
promise for therapeutic intervention using monoclonal antibodies,” said
Shigenori Ohkawa, PhD, General Manager of Pharmaceutical Research Division of
Takeda. “By expanding our collaboration with XOMA, we are able to accelerate our
antibody drug discovery and development efforts in oncology.”

About the XOMA / Takeda Collaboration

XOMA and Takeda began a collaboration in November of 2006 under which XOMA is
using its extensive collection of phage display libraries and antibody
optimization technologies to discover therapeutic antibodies against multiple
targets selected by Takeda. Other XOMA activities are expected to include
preclinical studies to support regulatory filings, cell line and process
development, and production of antibodies for initial clinical trials. Takeda
will be responsible for clinical trials and commercialization of drugs after IND
submission, and is granted the right to manufacture once the product enters into
phase 2 clinical trials.

The collaboration calls for Takeda to make up-front and milestone payments to
XOMA, fund XOMA’s R&D activities including manufacturing of the antibodies for
preclinical and early clinical supplies, and pay royalties to XOMA on sales of
products resulting from the collaboration.

Under the November 2006 collaboration agreement, payments to XOMA potentially
could have exceeded $100 million before royalties over the life of the
collaboration. Today’s announced

 

-6-

--------------------------------------------------------------------------------

amendment to the collaboration provides the potential for Takeda to add an
undisclosed number of new antibody discovery and development programs to those
specified in the initial agreement and raises the estimated potential payments
to XOMA to $230 million before royalties.

About XOMA

XOMA is a leader in the discovery, development and manufacture of therapeutic
antibodies, with a therapeutic focus that includes cancer and immune diseases.
XOMA has royalty interests in RAPTIVA® (efalizumab), a monoclonal antibody
product marketed worldwide (by Genentech, Inc. and Merck Serono, S.A.) to treat
moderate-to-severe plaque psoriasis, and LUCENTIS® (ranibizumab injection), a
monoclonal antibody product marketed worldwide (by Genentech and Novartis AG) to
treat neovascular (wet) age-related macular degeneration.

The company has built a premier antibody discovery and development platform that
includes access to seven of the leading commercially available antibody phage
display libraries and XOMA’s proprietary Human Engineering™ and Bacterial Cell
Expression (BCE) technologies. More than 45 companies have signed BCE licenses.
XOMA’s development collaborators include Lexicon Pharmaceuticals, Inc.,
Novartis, Schering-Plough Corporation and Takeda Pharmaceutical Company Limited.
With a fully integrated product development infrastructure, XOMA’s product
development capabilities extend from preclinical sciences to product launch. For
more information, please visit the company’s website at www.xoma.com.

About Takeda

Located in Osaka, Japan, Takeda is a research-based global pharmaceutical
company. As the largest pharmaceutical company in Japan and one of the global
leaders of the industry, Takeda is committed to striving toward better health
for individuals and progress in medicine by developing superior pharmaceutical
products.

Aiming to become an “R&D-driven world-class pharmaceutical company”, Takeda is
enhancing its R&D pipeline by concentrating its management resources for that
purpose in the following selected core therapeutic areas:

 

  •  

metabolic diseases (diabetes, hypertension, hyperlipidemia, etc.)

 

  •  

oncology and urological diseases

 

  •  

central nervous system disorders, bone/joint diseases

 

  •  

gastroenterological diseases

Additional information about Takeda is available through its corporate website,
www.takeda.com.

XOMA Contact:

Paul Goodson

Sr. Director, Investor Relations

Tel: (510) 204-7270

goodson@xoma.com

 

-7-

--------------------------------------------------------------------------------

Takeda Pharmaceutical Company Limited Contact:

Corporate Communications Department

Head Office: +81-6-6204-2060

Tokyo Head Office: +81-3-3278-2039

# # #

Certain statements contained herein concerning product development or that
otherwise relate to future periods are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such statements include, but are not limited
to, statements to the effect that payments to XOMA could exceed $230 million
before royalties over the life of the collaboration as amended or could have
exceeded $100 million before royalties over the life of the collaboration prior
to the amendment. Such statements are based on assumptions that may not prove
accurate. Actual results could differ materially from those anticipated due to
certain risks inherent in the biotechnology industry and for companies engaged
in the development of new products in a regulated market. In particular, XOMA
will not receive the estimated total amounts of funds if it cannot successfully
discover and develop antibodies as called for in this collaboration. These and
other risks, including those related to the results of discovery research and
preclinical testing; the timing or results of pending and future clinical trials
(including the design and progress of clinical trials; safety and efficacy of
the products being tested; action, inaction or delay by the FDA, European or
other regulators or their advisory bodies; and analysis or interpretation by, or
submission to, these entities or others of scientific data); uncertainties
regarding the status of biotechnology patents; uncertainties as to the cost of
protecting intellectual property; changes in the status of the existing
collaborative and licensing relationships; the ability of collaborators,
licensees and other third parties to meet their obligations; market demand for
products; scale up and marketing capabilities; competition; international
operations; share price volatility; XOMA’s financing needs and opportunities and
risks associated with XOMA’s status as a Bermuda company, are described in more
detail in XOMA’s most recent annual report on Form 10-K and in other SEC
filings. Consider such risks carefully in considering XOMA’s prospects.

 

-8-