XML: Cannot load even when string is escaped

I have big problem, I cant load XML file even when every special char is escaped. My XML:

    <code1>
    <code>&lt;?php
        // create curl resource
        $ch = curl_init();

        // set url
        curl_setopt($ch, CURLOPT_URL, &quot;example.com&quot;);

        //return the transfer as a string
        curl_setopt($ch, CURLOPT_RETURNTRANSFER, 1);

        // $output contains the output string
        $output = curl_exec($ch);

        // close curl resource to free up system resources
        curl_close($ch);
?&gt;</code>
</code1>

When I insert in <code></code> another string, ex. Hello world, it works. Why it doesnt work? BTW, I am using PHP's simplexml_load_file. Thank you.