The investigators will perform a double blind, placebo controlled clinical trial with Xolair (omalizumab) at four centers to safely and rapidly desensitize patients with severe peanut allergy. The investigators will determine if pretreatment with anti-IgE mAb (Xolair/omalizumab) can greatly reduce allergic reactions and allow for faster and safer desensitization.

36 subjects will receive Xolair, and 8 subjects will receive placebo. The study will occur at 4 sites: Boston Children's Hospital, Children's Hospital of Philadelphia, Stanford University and Lurie Children's Hospital.

Patients will be pre-treated with Xolair or placebo before rapid oral peanut desensitization. Patients will continue to receive Xolair during the 8 subsequent weeks of desensitization, receiving their final dose of Xolair one week after reaching the highest tolerated dose of peanut.

Inclusion Criteria:

• Moderate to severe peanut allergy-sensitive subjects between the ages of 7 to 25 years old.
• Sensitivity to peanut allergen will be documented by a positive skin prick test result (6 mm diameter wheal or greater)
• ImmunoCAP IgE level to peanut > 10 kU/L.
• Sensitivity to peanut allergen based on a double-blind placebo-controlled oral food challenge (DBPCFC) at maximum of cumulative 175 mg of peanut protein dose.

Exclusion Criteria:

• Subjects with a total IgE at screening of < 50 kU/L > 2,000 kU/L.
• Positive reaction to the placebo on DBPCFC.
• Previous reaction to omalizumab.
• Subjects having a history of severe anaphylaxis to peanut requiring intubation or admission to an ICU, frequent allergic or non-allergic urticaria, or history consistent with poorly controlled persistent asthma, or gastrointestinal or gastroesophageal disease.