QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Class | Outstanding at July 30, 2024 | |||||||
Common stock, par value $0.01 per share |
Page | ||||||||
June 30, 2024 | December 31, 2023 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable debt securities | |||||||||||
Marketable equity securities | |||||||||||
Accounts receivable | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Patents, licenses, and other intangible assets, net | |||||||||||
Restricted cash | |||||||||||
Marketable debt securities - long term | |||||||||||
Marketable equity securities - long term | |||||||||||
Right of use (ROU) asset | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Income tax payable | |||||||||||
Lease liabilities | |||||||||||
Deferred income | |||||||||||
Debt | |||||||||||
Total current liabilities | |||||||||||
Lease liabilities, net of current portion | |||||||||||
Deferred income, net of current portion | |||||||||||
Debt, net of current portion | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive (loss) income | ( | ||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity attributable to Xencor, Inc. | |||||||||||
Non-controlling interest | ( | ||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Collaborations, milestones, and royalties | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Impairment on equity securities | ( | ||||||||||||||||||||||
Gain (loss) on equity securities, net | ( | ( | ( | ||||||||||||||||||||
Total other income (expense), net | ( | ( | |||||||||||||||||||||
Loss before income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net loss | ( | ( | ( | ( | |||||||||||||||||||
Net loss attributable to non-controlling interest | ( | ( | |||||||||||||||||||||
Net loss attributable to Xencor, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic and diluted net loss per common share attributable to Xencor, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic and diluted weighted average common shares outstanding | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net loss | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Net unrealized gain (loss) on marketable debt securities | ( | ( | |||||||||||||||||||||
Comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive loss attributable to non-controlling interest | ( | ( | |||||||||||||||||||||
Comprehensive loss attributable to Xencor, Inc. | $ | ( | $ | ( | $ | ( | $ | ( |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-Controlling Interest | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock awards | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock units | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock awards | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock units | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under the Employee Stock Purchase Plan | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2024 (unaudited) | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-Controlling Interest | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock awards | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock units | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock awards | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock under the Employee Stock Purchase Plan | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 (unaudited) | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Accretion of discount on marketable debt securities | ( | ( | |||||||||
Stock-based compensation | |||||||||||
Equity received in connection with license agreements | ( | ||||||||||
Abandonment of capitalized intangible assets | |||||||||||
Gain on sale of marketable debt securities | ( | ||||||||||
Change in fair value of equity securities | |||||||||||
Impairment on equity securities | |||||||||||
Non-cash interest expense | |||||||||||
Loss on disposal of assets | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Interest receivable from marketable debt securities | ( | ||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable | |||||||||||
Accrued expenses | ( | ( | |||||||||
Income taxes | ( | ||||||||||
Lease liabilities and ROU assets | |||||||||||
Deferred revenue | ( | ||||||||||
Deferred income | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities | |||||||||||
Purchase of marketable securities | ( | ( | |||||||||
Sale of equity securities | |||||||||||
Purchase of patents, licenses, and other intangible assets | ( | ( | |||||||||
Purchase of property and equipment | ( | ( | |||||||||
Proceeds from maturities of marketable securities | |||||||||||
Proceeds from sale of marketable securities | |||||||||||
Net cash provided by investing activities | |||||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of common stock upon exercise of stock awards | |||||||||||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | |||||||||||
Reduction of liability for sale of future royalties | ( | ||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net decrease in cash, cash equivalents, and restricted cash | ( | ( | |||||||||
Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ | |||||||||
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Supplemental disclosure of cash flow information | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | $ | $ | |||||||||
Supplemental disclosures of non-cash activities | |||||||||||
Unrealized (loss) gain on marketable securities | $ | ( | $ | ||||||||
ROU assets obtained | $ | $ | |||||||||
Reconciliation of cash, cash equivalents, and restricted cash reported in the balance sheets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ | $ |
June 30, 2024 (unaudited) | December 31, 2023 | ||||||||||||||||||||||||||||||||||
Total Fair Value | Level 1 | Level 2 | Total Fair Value | Level 1 | Level 2 | ||||||||||||||||||||||||||||||
Money Market Funds | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Corporate Securities | |||||||||||||||||||||||||||||||||||
Government Securities | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(in thousands, except share and per share data) | (in thousands, except share and per share data) | ||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss attributable to Xencor, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average common shares outstanding used in computing basic and diluted net loss | |||||||||||||||||||||||
Basic and diluted net loss per common share attributable to Xencor, Inc. | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, 2024 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Money Market Funds | $ | $ | — | $ | — | $ | ||||||||||||||||||||
Corporate Securities | ( | |||||||||||||||||||||||||
Government Securities | ( | |||||||||||||||||||||||||
$ | $ | $ | ( | $ | ||||||||||||||||||||||
Reported as | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | |||||||||||||||||||||||||
Marketable securities | ||||||||||||||||||||||||||
Total investments | $ |
December 31, 2023 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Money Market Funds | $ | $ | — | $ | — | $ | ||||||||||||||||||||
Corporate Securities | ( | |||||||||||||||||||||||||
Government Securities | ( | |||||||||||||||||||||||||
$ | $ | $ | ( | $ | ||||||||||||||||||||||
Reported as | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | |||||||||||||||||||||||||
Marketable securities | ||||||||||||||||||||||||||
Total investments | $ |
June 30, 2024 | Amortized Cost | Estimated Fair Value | ||||||||||||
(in thousands) | ||||||||||||||
Mature in one year or less | $ | $ | ||||||||||||
Mature within two years | ||||||||||||||
$ | $ |
Less than 12 months | 12 months or greater | |||||||||||||||||||||||||
June 30, 2024 | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Corporate Securities | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Government Securities | ( | ( | ||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( |
Less than 12 months | 12 months or greater | |||||||||||||||||||||||||
December 31, 2023 | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Corporate Securities | $ | $ | ( | $ | $ | |||||||||||||||||||||
Government Securities | ( | |||||||||||||||||||||||||
$ | $ | ( | $ | $ |
Fair Value | Fair Value | ||||||||||
June 30, 2024 | December 31, 2023 | ||||||||||
Astria Common Stock | $ | $ | |||||||||
INmune Common Stock | |||||||||||
Viridian Common Stock | |||||||||||
$ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net gain (loss) recorded on equity securities | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Less: Net gain (loss) recorded on sale of equity securities | ( | ||||||||||||||||||||||
Unrealized gain (loss) recorded on equity securities held at the reporting date | $ | ( | $ | $ | ( | $ | ( |
Carrying Value | Carrying Value | ||||||||||
June 30, 2024 | December 31, 2023 | ||||||||||
Zenas Preferred Stock | $ | $ | |||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
General and administrative | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Stock options | $ | $ | $ | $ | |||||||||||||||||||
ESPP | |||||||||||||||||||||||
RSUs | |||||||||||||||||||||||
$ | $ | $ | $ |
Number of Shares Subject to Outstanding Options | Weighted Average Exercise Price (Per Share) | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | |||||||||||||||||||||
Options granted | $ | ||||||||||||||||||||||
Options forfeited | ( | $ | |||||||||||||||||||||
Options exercised | ( | $ | |||||||||||||||||||||
Balance at June 30, 2024 | $ | $ | |||||||||||||||||||||
Exercisable | $ | $ |
Options | Options | ||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Expected term (years) | |||||||||||||||||||||||
Expected volatility | % | % | % | % | |||||||||||||||||||
Risk-free interest rate | % | % | % | % | |||||||||||||||||||
Expected dividend yield | % | % | % | % |
ESPP | ESPP | ||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Expected term (years) | |||||||||||||||||||||||
Expected volatility | |||||||||||||||||||||||
Risk-free interest rate | |||||||||||||||||||||||
Expected dividend yield | % | % | % | % |
Restricted Stock Units | Weighted Average Grant Date Fair Value (Per unit) | ||||||||||
Unvested RSUs at December 31, 2023 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested RSUs at June 30, 2024 | $ |
Years ending December 31, | |||||
For the remainder of 2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
2029 | |||||
Thereafter | |||||
Total undiscounted lease payments | |||||
Less: Tenant allowance | ( | ||||
Less: Imputed interest | ( | ||||
Present value of lease payments | $ | ||||
Lease liabilities - short-term | $ | ||||
Lease liabilities - long-term | |||||
Total lease liabilities | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||
Total lease costs | $ | $ | $ | $ | |||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Alexion | $ | $ | $ | $ | |||||||||||||||||||
Janssen | |||||||||||||||||||||||
Mabgeek | $ | $ | $ | $ | |||||||||||||||||||
MorphoSys | |||||||||||||||||||||||
Vega | |||||||||||||||||||||||
Vir | |||||||||||||||||||||||
Viridian | $ | $ | $ | $ | |||||||||||||||||||
Zenas | $ | $ | $ | $ | |||||||||||||||||||
Third Party Licensee | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Research collaboration | $ | $ | $ | $ | |||||||||||||||||||
License | |||||||||||||||||||||||
Milestone | |||||||||||||||||||||||
Royalties | |||||||||||||||||||||||
Non-cash royalties | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2024 | |||||
Beginning balance of debt related to sale of future royalties | $ | ||||
Royalties owed to OMERS | |||||
Royalties paid to OMERS | ( | ||||
Non-cash interest expense recognized | |||||
Ending balance of debt related to sale of future royalties | $ | ||||
Debt - short-term | |||||
Debt - long-term | |||||
Total debt | $ |
Three Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Revenues: | |||||||||||||||||
Research collaboration | $ | — | $ | 22.2 | $ | (22.2) | |||||||||||
License | 8.5 | — | 8.5 | ||||||||||||||
Milestone | — | 10.0 | (10.0) | ||||||||||||||
Royalties | 8.5 | 13.3 | (4.8) | ||||||||||||||
Total revenues | 17.0 | 45.5 | (28.5) | ||||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 61.5 | 60.0 | 1.5 | ||||||||||||||
General and administrative | 17.7 | 11.5 | 6.2 | ||||||||||||||
Total operating expenses | 79.2 | 71.5 | 7.7 | ||||||||||||||
Other income (expense), net | (5.0) | 4.0 | (9.0) | ||||||||||||||
Loss before income tax expense | (67.2) | (22.0) | (45.2) | ||||||||||||||
Income tax expense | 0.1 | — | 0.1 | ||||||||||||||
Net loss | (67.3) | (22.0) | (45.3) | ||||||||||||||
Net loss attributable to non-controlling interest | (1.4) | — | (1.4) | ||||||||||||||
Net loss attributable to Xencor, Inc. | $ | (65.9) | $ | (22.0) | $ | (43.9) |
Three Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Product programs: | |||||||||||||||||
Bispecific programs: | |||||||||||||||||
CD3 programs: | |||||||||||||||||
Plamotamab* | $ | 2.8 | $ | 4.1 | $ | (1.3) | |||||||||||
XmAb819 (ENPP3 x CD3) | 6.8 | 4.8 | 2.0 | ||||||||||||||
XmAb541 (CLDN6 X CD3) | 4.5 | 6.3 | (1.8) | ||||||||||||||
Total CD3 programs | 14.1 | 15.2 | (1.1) | ||||||||||||||
XmAb808 (B7-H3 x CD28) | 5.2 | 4.3 | 0.9 | ||||||||||||||
Tumor micro environment (TME) activator programs: | |||||||||||||||||
Vudalimab | 12.2 | 9.6 | 2.6 | ||||||||||||||
XmAb104 | 0.7 | 5.8 | (5.1) | ||||||||||||||
Total TME activators programs | 12.9 | 15.4 | (2.5) | ||||||||||||||
Subtotal bispecific programs | 32.2 | 34.9 | (2.7) | ||||||||||||||
Cytokine programs: | |||||||||||||||||
XmAb306/RG6323 programs* | 4.9 | (0.5) | 5.4 | ||||||||||||||
XmAb564 | 2.3 | 5.9 | (3.6) | ||||||||||||||
XmAb662 (IL-12-Fc) | 2.0 | 3.8 | (1.8) | ||||||||||||||
Total cytokine programs | 9.2 | 9.2 | — | ||||||||||||||
Other, research and early stage programs | 19.9 | 14.7 | 5.2 | ||||||||||||||
Wind down costs of terminated programs (1) | 0.2 | 1.2 | (1.0) | ||||||||||||||
Total research and development expenses | $ | 61.5 | $ | 60.0 | $ | 1.5 |
Three Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
External research and development expenses | $ | 29.6 | $ | 25.0 | $ | 4.6 | |||||||||||
Internal research and development expenses | 23.2 | 25.9 | (2.7) | ||||||||||||||
Stock based compensation | 8.7 | 9.1 | (0.4) | ||||||||||||||
Total research and development expenses | $ | 61.5 | $ | 60.0 | $ | 1.5 |
Three Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
General and administrative | $ | 17.7 | $ | 11.5 | $ | 6.2 |
Six Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Revenues: | |||||||||||||||||
Research collaboration | $ | — | $ | 22.5 | $ | (22.5) | |||||||||||
License | 8.5 | — | 8.5 | ||||||||||||||
Milestone | 0.5 | 15.0 | (14.5) | ||||||||||||||
Royalties | 20.8 | 27.0 | (6.2) | ||||||||||||||
Total revenues | 29.8 | 64.5 | (34.7) | ||||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 118.4 | 125.6 | (7.2) | ||||||||||||||
General and administrative | 31.5 | 25.6 | 5.9 | ||||||||||||||
Total operating expenses | 149.9 | 151.2 | (1.3) | ||||||||||||||
Other income (expense), net | (15.8) | 4.0 | (19.8) | ||||||||||||||
Loss before income tax expense | (135.9) | (82.7) | (53.2) | ||||||||||||||
Income tax expense | 0.1 | — | 0.1 | ||||||||||||||
Net loss | $ | (136.0) | $ | (82.7) | $ | (53.3) | |||||||||||
Net loss attributable to non-controlling interest | (2.1) | — | (2.1) | ||||||||||||||
Net loss attributable to Xencor, Inc. | $ | (133.9) | $ | (82.7) | $ | (51.2) |
Six Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Product programs: | |||||||||||||||||
Bispecific programs: | |||||||||||||||||
CD3 programs: | |||||||||||||||||
Plamotamab* | $ | 5.0 | $ | 9.8 | $ | (4.8) | |||||||||||
XmAb819 (ENPP3 x CD3) | 13.1 | 9.3 | 3.8 | ||||||||||||||
XmAb541 (CLDN6 X CD3) | 7.0 | 10.9 | (3.9) | ||||||||||||||
Total CD3 programs | 25.1 | 30.0 | (4.9) | ||||||||||||||
XmAb808 (B7-H3 x CD28) | 10.5 | 8.1 | 2.4 | ||||||||||||||
Tumor micro environment (TME) activator programs: | |||||||||||||||||
Vudalimab | 23.7 | 17.3 | 6.4 | ||||||||||||||
XmAb104 | 3.2 | 13.0 | (9.8) | ||||||||||||||
Total TME activators programs | 26.9 | 30.3 | (3.4) | ||||||||||||||
Subtotal bispecific programs | 62.5 | 68.4 | (5.9) | ||||||||||||||
Cytokine programs: | |||||||||||||||||
XmAb306/RG6323 programs* | 10.4 | 4.5 | 5.9 | ||||||||||||||
XmAb564 | 6.8 | 12.5 | (5.7) | ||||||||||||||
XmAb662 (IL-12-Fc) | 4.8 | 7.0 | (2.2) | ||||||||||||||
Total cytokine programs | 22.0 | 24.0 | (2.0) | ||||||||||||||
Other, research and early stage programs | 33.2 | 28.9 | 4.3 | ||||||||||||||
Wind down costs of terminated programs (1) | 0.7 | 4.3 | (3.6) | ||||||||||||||
Total research and development expenses | $ | 118.4 | $ | 125.6 | $ | (7.2) |
Six Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
External research and development expenses | $ | 55.3 | $ | 54.0 | $ | 1.3 | |||||||||||
Internal research and development expenses | 47.7 | 54.2 | (6.5) | ||||||||||||||
Stock based compensation | 15.4 | 17.4 | (2.0) | ||||||||||||||
Total research and development expenses | $ | 118.4 | $ | 125.6 | $ | (7.2) |
Six Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
General and administrative | $ | 31.5 | $ | 25.6 | $ | 5.9 |
Six Months Ended June 30, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Net cash provided by (used in): | |||||||||||||||||
Operating activities | $ | (120,595) | $ | (68,814) | $ | (51,781) | |||||||||||
Investing activities | $ | 98,334 | $ | 46,739 | $ | 51,595 | |||||||||||
Financing activities | $ | (757) | $ | 2,843 | $ | (3,600) | |||||||||||
Net decrease in cash | $ | (23,018) | $ | (19,232) | $ | (3,786) |
Exhibit Number | Description of Document | |||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
101.INS | Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. | |||||||
101.SCH | Inline XBRL Schema Document | |||||||
101.CAL | Inline XBRL Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Labels Linkbase Document | |||||||
101.PRE | Inline XBRL Presentation Linkbase Document | |||||||
104 | 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
XENCOR, INC. | ||||||||
BY: | /s/ BASSIL I. DAHIYAT | |||||||
Bassil I. Dahiyat, Ph.D. | ||||||||
President and Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
BY: | /s/ BART JAN CORNELISSEN | |||||||
Bart Jan Cornelissen | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
Dated: August 5, 2024 |
CLIENT: | ||||||||||||||
Xencor, Inc. | ||||||||||||||
By: | /s/ Bassil Dahiyat | |||||||||||||
Name: | Bassil Dahiyat | |||||||||||||
Title: | President & CEO | |||||||||||||
Email: | baz@xencor.com | |||||||||||||
Address: | ||||||||||||||
465 N. Halstead, Suite 200 Pasadena, California 91107 | ||||||||||||||
CONSULTANT: | ||||||||||||||
/s/ John Kuch | ||||||||||||||
John Kuch | ||||||||||||||
Email: | jkuch@xencor.com | |||||||||||||
Address: | 555 Huntington Dr. | |||||||||||||
San Marino, CA 91108 | ||||||||||||||
CLIENT: | |||||||||||
Xencor, Inc. | |||||||||||
By: | /s/ Bassil Dahiyat | ||||||||||
Name: | Bassil Dahiyat | ||||||||||
Title: | President and CEO |
CONSULTANT: | |||||
/s/ John Kuch | |||||
John Kuch | |||||
/s/ BASSIL I. DAHIYAT | |||||
Bassil I. Dahiyat, Ph.D. | |||||
President & Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Date: August 5, 2024 |
/s/ BART JAN CORNELISSEN | |||||
Bart Jan Cornelissen | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
Date: August 5, 2024 |
/s/ BASSIL I. DAHIYAT | /s/ BART JAN CORNELISSEN | |||||||
Bassil I. Dahiyat | Bart Jan Cornelissen | |||||||
President & Chief Executive Officer | Chief Financial Officer | |||||||
(Principal Executive Officer) | (Principal Financial Officer) |
Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 61,766,054 | 60,998,191 |
Common stock, shares outstanding (in shares) | 61,766,054 | 60,998,191 |
Consolidated Statements of Loss (unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Revenue | ||||
Collaborations, milestones, and royalties | $ 16,960,000 | $ 45,523,000 | $ 29,765,000 | $ 64,485,000 |
Operating expenses | ||||
Research and development | 61,531,000 | 60,060,000 | 118,404,000 | 125,612,000 |
General and administrative | 17,746,000 | 11,460,000 | 31,533,000 | 25,613,000 |
Total operating expenses | 79,277,000 | 71,520,000 | 149,937,000 | 151,225,000 |
Loss from operations | (62,317,000) | (25,997,000) | (120,172,000) | (86,740,000) |
Other income (expense) | ||||
Interest income | 7,681,000 | 3,771,000 | 16,229,000 | 6,670,000 |
Interest expense | (844,000) | (7,000) | (1,921,000) | (14,000) |
Other expense, net | (4,000) | (9,000) | (4,000) | (23,000) |
Impairment on equity securities | 220,000 | 0 | (20,430,000) | 0 |
Gain (loss) on equity securities, net | (12,027,000) | 288,000 | (9,702,000) | (2,610,000) |
Total other income (expense), net | (4,974,000) | 4,043,000 | (15,828,000) | 4,023,000 |
Loss before income tax expense | (67,291,000) | (21,954,000) | (136,000,000) | (82,717,000) |
Income tax expense | 117,000 | 0 | 117,000 | 0 |
Net loss | (67,408,000) | (21,954,000) | (136,117,000) | (82,717,000) |
Net loss attributable to non-controlling interest | (1,445,000) | 0 | (2,121,000) | 0 |
Net loss attributable to Xencor, Inc. | $ (65,963,000) | $ (21,954,000) | $ (133,996,000) | $ (82,717,000) |
Basic net loss per common share attributable to Xencor, Inc. (in dollars per share) | $ (1.07) | $ (0.37) | $ (2.18) | $ (1.38) |
Diluted net loss per common share attributable to Xencor, Inc. (in dollars per share) | $ (1.07) | $ (0.37) | $ (2.18) | $ (1.38) |
Weighted average shares used to compute net income (loss) per share attributable to common stockholders: | ||||
Basic weighted average common shares outstanding (in shares) | 61,676,444 | 59,807,558 | 61,444,384 | 59,922,784 |
Diluted weighted average common shares outstanding (in shares) | 61,676,444 | 59,807,558 | 61,444,384 | 59,922,784 |
Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (67,408) | $ (21,954) | $ (136,117) | $ (82,717) |
Net unrealized gain (loss) on marketable debt securities | (498) | 1,765 | (1,942) | 5,093 |
Comprehensive loss | (67,906) | (20,189) | (138,059) | (77,624) |
Comprehensive loss attributable to non-controlling interest | (1,445) | 0 | (2,121) | 0 |
Comprehensive loss attributable to Xencor, Inc. | $ (66,461) | $ (20,189) | $ (135,938) | $ (77,624) |
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of consolidated interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the consolidated interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited consolidated interim financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 29, 2024. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Xencor, Inc. and Gale Therapeutics Inc. (Gale), a variable interest entity (VIE) in which we are the primary beneficiary. Since we own less than 100% of Gale, the Company records net loss attributable to non-controlling interests in its consolidated statements of loss equal to the percentage of the economic or ownership interests retained in Gale by the non-controlling party. In determining whether we are the primary beneficiary of a VIE, we apply a qualitative approach that determines whether we have (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses of, or the right to receive benefits from the VIE that could potentially be significant to the VIE. We continuously assess whether we are the primary beneficiary of Gale as changes to existing relationships or future transactions may result in us consolidating or deconsolidating Gale. Use of Estimates The preparation of consolidated interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive income (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, evaluation of intangible assets, investments, leases and other assets for evidence of impairment, fair value measurements, and contingencies. Significant estimates in these consolidated interim financial statements include estimates made for royalty revenue, accrued research and development expenses, stock-based compensation expenses, intangible assets, incremental borrowing rate for right-of-use asset and lease liability, estimated standalone selling price of performance obligations, estimated time for completing delivery of performance obligations under certain arrangements, the likelihood of recognizing variable consideration, the carrying value of equity instruments without a readily determinable fair value, and recoverability of deferred tax assets. Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified to conform to the current period's presentation. These reclassifications did not affect the prior period's total assets, liabilities, stockholders' equity, net loss or cash flows. During the six months ended June 30, 2024, we adopted a change in presentation on our consolidated statements of loss to include loss from disposal of fixed assets in operating expenses. The prior period has been revised to reflect this change in the presentation. Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There was no impairment charge recorded for the three and six months ended June 30, 2024 and 2023. The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. We abandoned $0.4 million and $0.8 million of in-process intangible assets for the three and six months ended June 30, 2024. We abandoned $0.3 million and $0.6 million of in-process intangible assets during the three and six months ended June 30, 2023. Marketable Debt and Equity Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and concentration and diversification. The investment policy limits the maturity of any individual security to a maximum of 36 months. The average maturity of securities in the portfolio as of June 30, 2024 is less than 12 months. The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions. The Company considers its marketable debt securities to be available-for-sale because it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost. These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss). There were no impairment losses or recoveries recorded for the three and six months ended June 30, 2024 and 2023. Accrued interest on marketable debt securities is included in the marketable securities’ carrying value. Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis. During the three and six months ended June 30, 2024, the Company recorded an unrealized loss of $0.5 million and $1.9 million in its portfolio of marketable debt securities. During the three and six months ended June 30, 2023, the Company recorded an unrealized gain of $1.8 million and $5.1 million. The unrealized loss is due to the changing interest rate environment and is not due to changes in the credit quality of the underlying securities. The unrealized gain (loss) is recorded in other comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023. The Company receives equity securities in connection with certain licensing transactions with its partners. These investments in equity securities are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For equity securities with a readily determinable fair value, the Company remeasures these equity investments at each reporting period until such time that the investment is sold or disposed. If the Company sells an investment, any realized gain or loss on the sale of the securities will be recognized within other income (expense) in the consolidated statements of loss in the period of sale. The Company also has investments in equity securities without a readily determinable fair value, where the Company elects the measurement alternative to record the investment at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There was an impairment charge of $20.4 million recorded for the six months ended June 30, 2024 in connection with equity securities without a readily determinable fair value. There was no impairment charge recorded for the three and six months ended June 30, 2023. Liability Related to the Sale of Future Revenues We treat the sale of future Monjuvi royalties as debt, amortized under the effective interest rate method over the estimated life of the Monjuvi Royalty Sale Agreement. See Note 11. The amortization of the liability related to the sale of future Monjuvi royalties is based on our current estimate of future royalty payments. Royalty revenue will be recognized as earned and the payments made will be a reduction of the liability when paid. Non-cash Interest Expense on the Liability Related to the Sale of Future Royalties The total expected royalty payments less the net proceeds received are recorded as non-cash interest expense over the life of the liability. Interest is imputed on the unamortized portion using the effective interest method and is recorded based on the timing of the payments received over the term of the Monjuvi Royalty Sale Agreement. The actual interest rate will be affected by the timing of the royalty payments and changes in the forecasted revenue. Deferred Income Related to the Sale of Future Revenues We treat the sale of future Ultomiris royalties as deferred income, amortized under the units-of-revenue method by computing a ratio of the proceeds received to the total expected payments over the term of the Ultomiris Royalty Sale Agreement. See Note 11. The amortization of the liability related to the sale of future royalties is based on our current estimate of future royalty payments. Royalty revenue will be recognized as earned and the payments made will be a reduction of the liability when paid. Recent Accounting Pronouncements There have been no material changes in recently issued or adopted accounting standards from those disclosed in the Company's 2023 Annual Report on Form 10-K. The Company has reviewed all recently issued accounting pronouncements and does not believe they will have a material impact on our results of operations, financial condition or cash flows. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2023 Annual Report on Form 10-K.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments included in the financial statements include cash and cash equivalents, marketable debt and equity securities, accounts receivable, accounts payable, and accrued expenses. Marketable debt securities, equity securities, and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short-term maturities. The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements. The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities. Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity – e.g., determining an appropriate discount factor for illiquidity associated with a given security. The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):
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Net Loss Per Common Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per common share is computed by dividing the net loss attributable to Xencor by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net loss per common share is computed by dividing the net loss attributable to Xencor by the weighted-average number of common stock equivalents outstanding for the period. Potentially dilutive securities consisting of stock issuable pursuant to outstanding options and restricted stock units (RSUs), and stock issuable pursuant to the 2013 Employee Stock Purchase Plan (ESPP) are not included in the per common share calculation in periods when the inclusion of such shares would have an anti-dilutive effect. Basic and diluted net loss per common share is computed as follows:
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Comprehensive Loss |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive income (loss). For each of the three and six-month periods ended June 30, 2024 and 2023, the only component of other comprehensive income (loss) is net unrealized gain (loss) on marketable debt securities. There were no material reclassifications out of accumulated other comprehensive loss during each of the three and six-month periods ended June 30, 2024 and 2023.
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Marketable Debt and Equity Securities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Debt and Equity Securities | Marketable Debt and Equity Securities The Company’s marketable debt securities held as of June 30, 2024 and December 31, 2023 are summarized below:
The maturities of the Company’s marketable debt securities as of June 30, 2024 are as follows:
The unrealized losses on available-for-sale investments and their related fair values as of June 30, 2024 and December 31, 2023 are as follows:
The unrealized losses from the available-for-sale securities are due to changes in the interest rate environment and not changes in the credit quality of the underlying securities in the portfolio. The Company’s equity securities include securities with a readily determinable fair value. These investments are carried at fair value with changes in fair value recognized each period and reported within other income (expense), net. For the three and six months ended June 30, 2024, net losses of $12.0 million and $9.7 million were recorded under other income (expense) related to these securities. For the three and six months ended June 30, 2023, a net gain of $0.3 million and a net loss of $2.6 million were recorded under other income (expense). Equity securities with a readily determinable fair value, which are categorized as Level 1 in the fair value hierarchy under ASC 820, and their fair values (in thousands) as of June 30, 2024 and December 31, 2023 are as follows:
The Company sold 443,909 shares of common stock of Astria Therapeutics, Inc. (Astria) and held 253,958 shares of common stock of Astria as of June 30, 2024. In July 2024, the Company sold the remaining shares of the common stock of Astria. The common stock has a readily determinable fair value. For the remaining equity interest in Astria held at June 30, 2024, the Company recorded an unrealized loss of $1.3 million and an unrealized gain of $0.4 million for the three and six months ended June 30, 2024, respectively. The Company recorded unrealized losses of $3.5 million and $3.9 million related to its equity interest in Astria for the three and six months ended June 30, 2023, respectively. The Company currently holds 1,885,533 shares of common stock of INmune Bio, Inc. (INmune). The 1,885,533 shares of INmune common stock are classified as equity securities with a readily determinable fair value. For the three and six months ended June 30, 2024, the Company recorded unrealized losses of $5.5 million and $4.6 million, respectively, related to its investment in INmune. For the three and six months ended June 30, 2023, the Company recorded unrealized gains of $4.9 million and $5.2 million, respectively. The Company currently holds 717,144 shares of common stock of Viridian Therapeutics, Inc. (Viridian). The shares of Viridian common stock are classified as equity securities with a readily determinable fair value. The Company recorded unrealized losses of $3.2 million and $6.3 million for the three and six months ended June 30, 2024, respectively. The Company recorded unrealized losses of $1.2 million and $3.9 million for the three and six months ended June 30, 2023, respectively, related to the shares of Viridian common stock. Below is a reconciliation of net gain (loss) recorded on equity securities during the three and six months ended June 30, 2024 and 2023:
The Company also has investments in equity securities without a readily determinable fair value. The Company elects the measurement alternative to record these investments at their initial cost and evaluates such investments at each reporting period for evidence of impairment, or observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Equity securities without a readily determinable fair value and their carrying values (in thousands) as of June 30, 2024 and December 31, 2023 are as follows:
The Company currently holds an equity interest in Zenas BioPharma, Inc. (Zenas), a private biotechnology company. The Company’s equity interests include preferred stock in Zenas which were received as upfront payments and a milestone payment for licensing certain clinical and preclinical assets from the Company. The Company elected the measurement alternative to carry the Zenas equity at cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. During the six months ended June 30, 2024, we recorded $20.4 million of impairment charge as a result of Zenas closing a Series C financing transaction on May 3, 2024.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock Based Compensation In June 2023, our Board of Directors (the Board) and stockholders approved the 2023 Equity Incentive Plan (the 2023 Plan), which became effective as of June 14, 2023. The Board and the requisite stockholders previously approved the 2013 Equity Incentive Plan (the 2013 Plan). We suspended the 2013 Plan, and no additional award may be granted under the 2013 Plan. The 2023 Plan reserve consists of 3,000,000 shares and the remaining available shares from the 2013 Plan as of the effective date of the 2023 Plan. In addition, any shares of common stock covered by awards granted under the 2013 Plan that terminate on or after June 14, 2023 by expiration, forfeiture, cancellation, or other means without the issuance of such shares will be added to the 2023 Plan reserve. The 2023 Plan does not include a provision for an automatic increase in shares, also known as an evergreen provision. As of June 30, 2024, the total number of shares of common stock available for issuance under the 2023 Plan is 18,721,104, which includes shares of common stock that were available for issuance under the prior Plans as of the effective date of the 2023 Plan. As of June 30, 2024, a total of 2,380,651 options have been granted under the 2023 Plan. In November 2013, the Board and our stockholders approved the ESPP, which became effective as of December 5, 2013. As of June 30, 2024, the total number of shares of common stock available for issuance under the ESPP is 987,344. Unless otherwise determined by the Board, beginning on January 1, 2014, and continuing until January 1, 2023, the total number of shares of common stock available for issuance under the ESPP automatically increased annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. The automatic increase has expired, and the number of shares of common stock available for issuance under the ESPP was not increased on January 1, 2024. As of June 30, 2024, we have issued a total of 787,474 shares of common stock under the ESPP. During the six months ended June 30, 2024, the Company awarded 959,071 RSUs to certain employees. The standard vesting of these awards is generally in three equal annual installments and is contingent on an employee’s continued service to the Company. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period. As of June 30, 2024, a total of 1,045,738 RSUs have been granted under the 2023 Plan. The Company extended vesting periods and expiration dates of equity awards for employees who retired in April 2024. There is a $3.1 million incremental expense as a result of the extension of the expiration dates, and there is a $1.2 million expense as a result of the extension of the vesting periods. Total employee, director and non-employee stock-based compensation expense recognized for the three and six months ended June 30, 2024 and 2023 are as follows (in thousands):
The following table summarizes option activity under our stock plans and related information:
We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $18.93 per share as of June 30, 2024. The weighted-average fair value of options granted during the six-month periods ended June 30, 2024 and 2023 were $22.43 and $30.65 per share, respectively. There were 1,941,412 options granted during the six-month period ended June 30, 2023. We estimated the fair value of each equity award, including stock options and shares issued under our ESPP, using the Black-Scholes option-pricing model based on the date of grant of such stock option or ESPP share issuance date, with the following weighted average assumptions for the three and six months ended June 30, 2024 and 2023:
As of June 30, 2024, the unamortized compensation expense related to unvested stock options was $56.9 million. The remaining unamortized compensation expense will be recognized over the next 2.7 years. As of June 30, 2024, the unamortized compensation expense under our ESPP was $1.3 million. The remaining unamortized expense will be recognized over the next 1.4 years. The following table summarizes the RSU activity for the six-month period ended June 30, 2024:
As of June 30, 2024, the unamortized compensation expense related to unvested RSUs was $37.0 million. The remaining unamortized expense will be recognized over the next 2.1 years.
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Leases |
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Leases | Leases The Company leases office and laboratory space in Monrovia, California under a lease that expires in December 2025 with an option to renew for an additional five years at then market rates. The Company has assessed that it is unlikely to exercise the option to extend the lease term. In June 2021, the Company entered into an Agreement of Lease (Lease Agreement) for laboratory and office space in Pasadena, California, which will expire in July 2035. The Lease Agreement provides for two separate phases of lease and occupancy. The first phase commenced on August 1, 2022 and provides the Company with an improvement allowance up to $17.0 million. The second phase of the lease agreement will commence no later than September 30, 2026 and includes an additional improvement allowance up to $3.3 million. In August 2022, the Company entered into an amendment, which the Company received an additional $5.0 million in tenant improvement allowance in exchange for an increase in the rental rate of the phase 1 space. The Company received delivery of the second phase premises on December 1, 2022. The Company placed the new facility into service in February 2023. In January 2024, the Company entered into an amendment, in which the Company will be paid for $0.7 million of tenant improvement allowance from the second phase for HVAC costs in the first phase. In August 2023, the Company entered into a Sublease Agreement for office space in San Diego, California. The term of the Sublease Agreement begins in September 2023 and ends in December 2027. In connection with the Sublease Agreement, the Company provided a $0.4 million Letter of Credit to the landlord. The Letter of Credit will decline over the term of the lease. The Company also entered into a Cash Collateral Agreement for $0.4 million, which is classified as restricted cash in the Consolidated Balance Sheets. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. The following table reconciles the undiscounted cash flows for the operating leases at June 30, 2024 to the operating lease liabilities recorded on the balance sheet (in thousands):
The following table summarizes lease costs and cash payments for the three and six months ended June 30, 2024 and 2023 (in thousands):
As of June 30, 2024, the weighted-average remaining lease term for operating leases is 10.7 years, and the weighted-average discount rate for operating leases is 7.0%. As of June 30, 2023, the weighted-average remaining lease term for operating leases was 11.7 years, and the weighted-average discount rate for operating leases was 8.9%.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company may be subject to various litigation and related matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred. The Company is obligated to make future payments to third parties pursuant to certain license agreements, including sublicense fees, royalties, and payments that become due and payable on the achievement of certain development and commercialization milestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on the Company’s balance sheets for the periods ended June 30, 2024 and December 31, 2023. The Company has also entered into agreements with third-party vendors that will require us to make future payments upon the delivery of goods and services in future periods.
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Collaboration and Licensing Agreements |
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Collaboration and Licensing Agreements | Collaboration and Licensing Agreements The following is a summary description of the material collaboration arrangements in the three and six months ended June 30, 2024 and 2023. Alexion Pharmaceuticals, Inc. In January 2013, the Company entered into an Option and License Agreement (the Alexion Agreement) with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the Alexion Agreement, the Company granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use the Company’s Xtend technology to evaluate and advance compounds. Alexion exercised its rights to one target program, ALXN1210, which is now marketed as Ultomiris®. The Company is entitled to receive royalties based on a percentage of net sales of Ultomiris sold by Alexion, its affiliates or its sublicensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product-by-product and country-by-country basis until the expiration of the last-to-expire valid claim in a licensed patent covering the applicable product in such country. On November 3, 2023, the Company entered into the Ultomiris Royalty Sale Agreement with OMERS, in which OMERS acquired the rights to certain royalties associated with the existing license relating to Ultomiris in exchange for cash consideration. For the six months ended June 30, 2024, Company earned and recognized $16.3 million in non-cash royalty revenue under the Ultomiris Royalty Sale Agreement. The Company recognized $6.9 million and $16.3 million of non-cash royalty revenue during the three and six months ended June 30, 2024, respectively, and $11.2 million and $21.6 million of royalty revenue under this arrangement for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, there is no receivable and no deferred revenue related to this agreement. Genentech, Inc., and F. Hoffmann-La Roche Ltd In February 2019, the Company entered into a collaboration and license agreement (the Genentech Agreement) with Genentech, Inc. and F. Hoffmann-La Roche Ltd (collectively, Genentech) for the development and commercialization of novel IL-15 collaboration products (Collaboration Products), including efbalropendekin alfa (also named XmAb306 and RG6323), the Company’s IL-15/IL15Rα-Fc candidate. Under the terms of the Genentech Agreement, Genentech received an exclusive worldwide license to XmAb306, and we shared in 45% of development and commercialization costs of Collaboration Products, and we were eligible to share in 45% of net profits and losses from the sale of approved products. However, in the fourth quarter of 2023, we agreed with Genentech to convert our current development cost and profit-sharing arrangement into a royalty and milestone payment-based arrangement. Pursuant to the terms of the amended agreement with Genentech, effective June 1, 2024, Genentech assumed sole responsibility over all clinical, regulatory and commercial activities. We are eligible to receive up to $600.0 million in milestones, including $115.0 million in development milestones, $185.0 million in regulatory milestones and $300.0 million in sales-based milestones and tiered royalties ranging from low double-digit to mid-teens percentages. The Company did not recognize revenue related to the Genentech Agreement for the three and six months ended June 30, 2024 or 2023. As of June 30, 2024, there is a $7.6 million payable related to cost-sharing development activities during the first half of 2024 for development studies being conducted under the Genentech Agreement. There is no deferred revenue as of June 30, 2024, as obligations to perform research activities have expired. Janssen Biotech, Inc., a Johnson & Johnson company J&J Agreement In November 2020, the Company entered into a Collaboration and License Agreement (the J&J Agreement) with Janssen Biotech, Inc., a Johnson & Johnson company, pursuant to which the Company and J&J conducted research and development activities to discover novel CD28 bispecific antibodies for the treatment of prostate cancer. Xencor together with J&J conducted joint research activities to discover XmAb bispecific antibodies against CD28 and against an undisclosed prostate tumor-target with J&J maintaining exclusive worldwide rights to develop and commercialize licensed products identified from the research activities. Under the J&J Agreement, the Company conducted research activities and applied its bispecific Fc technology to antibodies targeting prostate cancer provided by J&J. Upon completion of the research activities J&J had a candidate selection option to advance an identified candidate for development and commercialization. In November 2021, the Company completed its performance obligations under the research activities and delivered CD28 bispecific antibodies to J&J. In December 2021, J&J selected a bispecific CD28 candidate for further development. J&J will assume full responsibility for development and commercialization of the CD28 bispecific antibody candidate. The Company did not recognize revenue for the three and six months ended June 30, 2024 and 2023 under the J&J Agreement. As of June 30, 2024, there is no deferred revenue related to this Agreement. Second J&J Agreement On October 1, 2021, the Company entered into a second Collaboration and License Agreement (the Second J&J Agreement) with J&J pursuant to which the Company granted J&J an exclusive worldwide license to develop, manufacture, and commercialize plamotamab, the Company’s CD20 x CD3 development candidate, and pursuant to which Xencor and J&J conducted research and development activities to discover novel CD28 bispecific antibodies. The parties conducted joint research activities for a two-year period to discover XmAb bispecific antibodies against CD28 and undisclosed B cell tumor-targets with J&J receiving exclusive worldwide rights, subject to certain Xencor opt-in rights, to develop, manufacture and commercialize pharmaceutical products that contain one or more of such discovered antibodies (CD28 Licensed Antibodies). The Agreement became effective on November 5, 2021. The Company collaborated with J&J on clinical development of plamotamab with J&J and shared development costs with J&J paying 80% and the Company paying 20% of certain development costs. In June 2024, the Company was notified that J&J will terminate its rights to plamotamab. The Company is generally responsible for conducting research activities under the Second J&J Agreement, and J&J is generally responsible for all development, manufacturing, and commercialization activities for CD28 Licensed Antibodies that are advanced. Revenue from the research activities was recognized over a period of time through the end of the research term that services were rendered as we determined that the input method was the appropriate approach to recognize income for such services. There is a receivable of $5.2 million as of June 30, 2024, related to cost-sharing activities for development of plamotamab under the Second J&J Agreement. No revenue was recognized for the three and six months ended June 30, 2024, and the Company recognized $22.2 million and $27.5 million of revenue for the three and six months ended June 30, 2023, respectively. There is no deferred revenue as of June 30, 2024 related to the Second J&J Agreement as obligations to perform research activities have expired. MorphoSys AG/Incyte Corporation In June 2010, the Company entered into a Collaboration and License Agreement with MorphoSys AG (MorphoSys), which was subsequently amended. Under the agreement, we granted MorphoSys an exclusive worldwide license to the Company’s patents and know-how to research, develop and commercialize the XmAb5574 product candidate (subsequently renamed MOR208 and tafasitamab) with the right to sublicense under certain conditions. In February 2024, Incyte Corporation acquired exclusive global development and commercialization rights to tafasitamab. If certain developmental, regulatory and sales milestones are achieved, the Company is eligible to receive future milestone payments and royalties. On November 3, 2023, the Company entered into the Monjuvi Royalty Sale Agreement with OMERS, pursuant to which OMERS acquired the rights to certain royalties earned after July 1, 2023 associated with the existing license relating to Monjuvi. The Company recognized $1.6 million and $4.4 million of non-cash royalty revenue during the three and six months ended June 30, 2024, respectively. The Company recognized $2.0 million and $3.9 million of royalty revenue during the three and six months ended June 30, 2023, respectively. As of June 30, 2024, there is a receivable of $2.1 million related to estimated royalties due under the arrangement. As of June 30, 2024, there is no deferred revenue related to this agreement. Shanghai Mabgeek Biotech Co., Ltd. On December 22, 2023, the Company entered into a Technology License Agreement with Shanghai Mabgeek Biotech Co., Ltd. (Mabgeek), and the Company and Mabgeek entered into Amendment No. 1 on June 21, 2024 (collectively, Mabgeek Agreement). Under the Mabgeek Agreement, the Company received an upfront payment of $1.5 million and up to $11.9 million of milestones. In addition, the Company is eligible to receive royalties on the net sales of approved products in the low single digits. The Company evaluated the Mabgeek Agreement and determined that the single performance obligation was access to a non-exclusive license to certain patents of the Company which were transferred to Mabgeek in June 2024. The Company recognized $1.5 million of license revenue related to the agreement for the three and six months ended June 30, 2024. There is no deferred revenue as of June 30, 2024 related to this agreement. Vega Therapeutics, Inc. In October 2021, the Company entered into a Technology License Agreement (the Vega Agreement) with Vega Therapeutics, Inc. (Vega), in which the Company provided Vega a non-exclusive license to its Xtend Fc technology. In March 2024, Vega notified the Company that it initiated a Phase 1 study, and the Company recorded milestone revenue of $0.5 million. The Company recognized $0.5 million of revenue for the six months ended June 30, 2024. No revenue was recognized for the three months ended June 30, 2024 or the three and six months ended June 30, 2023. Vir Biotechnology, Inc. In 2019, the Company entered into a Patent License Agreement (the Vir Agreement) with Vir Biotechnology, Inc. (Vir) pursuant to which the Company provided a non-exclusive license to its Xtend technology for up to two targets. In March 2020, the Company entered into a second Patent License Agreement (the Second Vir Agreement) with Vir pursuant to which the Company provided a non-exclusive license to its Xtend technology to extend the half-life of novel antibodies Vir developed as potential treatments for patients with COVID-19, including sotrovimab. Under the terms of the Second Vir Agreement, Vir is responsible for all research, development, regulatory and commercial activities for the antibodies, and the Company is eligible to receive royalties on the net sales of approved products in the mid-single digit percentage range. Vir and its marketing partner, GSK, began recording sales for sotrovimab beginning in June 2021. The Company recognized $0.1 million of revenue for the six months ended June 30, 2024, and the Company recognized $0.1 million and $1.5 million of royalty revenue for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, there is no receivable related to estimated royalty due under this agreement, and there is no deferred revenue related to this agreement. Zenas BioPharma, Inc. In November 2020, the Company entered into a License Agreement (the Zenas Agreement) with Zenas, pursuant to which the Company received an equity interest in Zenas in exchange for the exclusive, worldwide rights to develop and commercialize drug candidates from the Company. The equity in Zenas is recorded at the fair value as of the date of the Zenas Agreement and is reviewed each reporting period for impairment or other evidence of change in value. In November 2021, the Company entered into a second License Agreement (Second Zenas Agreement) with Zenas, pursuant to which the Company received additional equity in Zenas in exchange for the exclusive worldwide rights to develop and commercialize the Company’s obexelimab (XmAb5871) drug candidate. Under the license, the Company is eligible to receive development, regulatory and sales milestones in connection with the development of obexelimab and royalties on net sales of approved products. The original equity received for the second license was a warrant to acquire additional shares of Zenas. The warrant was exchanged for additional preferred stock in Zenas in November 2022. The warrant in Zenas was recorded at its fair value as of the date of the Second Zenas Agreement and was reviewed each reporting period for impairment or other evidence of change in value. The preferred shares received in exchange for the warrant were recorded at their fair value at the date of the exchange and is reviewed each reporting period for impairment or other evidence of change in value. In 2023, Zenas initiated a Phase 3 clinical study with obexelimab and also dosed a second patient in the study. The Company received a development milestone in the form of additional preferred stock in Zenas with a fair value of $10.0 million. The Company recognized an impairment charge of $20.4 million in the six months ended June 30, 2024 due to an impairment analysis resulting from the Zenas Series C financing transaction. The Company did not record an impairment charge or change in the value of the Zenas equity in the three and six months ended June 30, 2023. The Company did not recognize any revenue for the three and six months ended June 30, 2024. The Company recognized $10.0 million of milestone revenue for the three and six months ended June 30, 2023, and there is no deferred revenue related to this agreement. Third-Party Licensee In May 2024, the Company entered into a Patent License Agreement (Third-Party Licensee Agreement) with a third-party licensee. The Company completed delivery of the performance obligation under the agreement, and the Company will receive a payment of $7.0 million. The Company recognized $7.0 million of license revenue for the three and six months ended June 30, 2024, and there is a receivable of $7.0 million. There is no deferred revenue related to this agreement. Gale Therapeutics Inc. In the fourth quarter of 2023, the Company formed a subsidiary, Gale Therapeutics Inc. (Gale), to develop novel drug candidates with its Fc technologies. In December 2023, the Company entered into a Technology License Agreement (Gale License Agreement) with Gale in which Gale received an exclusive worldwide, royalty-bearing, non-transferable license to preclinical assets in exchange for royalties on future sales and an option for future drug candidates that Gale will develop. Concurrently, the Company entered into a Service Agreement (Gale Services Agreement) to provide research and development services and administrative support for Gale. In exchange for $7.5 million of funding, the Company acquired a majority stake in Gale. Total charges of $4.6 million and $8.0 million under the Gale Services Agreement for the three and six months ended June 30, 2024, respectively, were eliminated in consolidation. In July 2024, the Company entered into a preferred stock purchase agreement to purchase additional shares in Gale for $3.0 million. Revenues earned The revenues recorded for the three and six months ended June 30, 2024 and 2023 were earned principally from the following licensees (in millions):
The table below summarizes the disaggregation of revenue recorded for the three and six months ended June 30, 2024 and 2023 (in millions):
Remaining Performance Obligations and Deferred Revenue The Company does not have any remaining performance obligation as of June 30, 2024. As of June 30, 2023, the Company had deferred revenue of $7.9 million for conducting research activities pursuant to the Second J&J Agreement. All deferred revenue as of June 30, 2023 was classified as current liabilities as the Company’s obligations to perform services are due on demand when requested by J&J under the Second J&J Agreement.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes The Company recorded $0.1 million of income tax expense for the three and six months ended June 30, 2024. There is no provision for income tax for the three and six months ended June 30, 2023. As of June 30, 2024, the Company’s deferred income tax assets, consisting primarily of net operating loss and tax credit carryforwards, have been fully offset by a valuation allowance.
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Sales of Future Royalties |
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Future Royalties | Sale of Future Royalties Ultomiris Royalty Sale Agreement The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be recorded as deferred income on the balance sheets as none of the criteria for classification as debt were met in accordance with ASC 470 Debt. The Company records the non-cash royalty revenue under the “units-of-revenue” method in the consolidated statements of loss. For the three and six months ended June 30, 2024, the Company recognized $6.9 million and $16.3 million of non-cash royalty revenue, respectively. There is $140.6 million in deferred income as of June 30, 2024. Monjuvi Royalty Sale Agreement The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be classified as debt pursuant to ASC 470 Debt. At June 30, 2024, the Company reassessed the estimate of total future royalty payments and updated the estimated effective interest rate to 17.5%. The Company will continue to reassess the estimate of total future royalty payment and prospectively adjust the imputed interest rate and related amortization if the estimate is materially different. For the three and six months ended June 30, 2024, the Company recognized $1.6 million and $4.4 million of non-cash royalty revenue, respectively, and $0.8 million and $1.9 million of non-cash interest expense, respectively. The following table shows the activity within debt for the six months ended June 30, 2024 (in thousands):
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (65,963) | $ (21,954) | $ (133,996) | $ (82,717) |
Insider Trading Arrangements |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2024
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Jun. 30, 2024
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Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Bassil Dahiyat [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 14, 2024, Bassil Dahiyat, our Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 66,192 shares of the Company's common stock until February 13, 2025.
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Name | Bassil Dahiyat | |
Title | Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 14, 2024 | |
Expiration Date | February 13, 2025 | |
Arrangement Duration | 244 days | |
Aggregate Available | 66,192 | 66,192 |
John Desjarlais [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 14, 2024, John Desjarlais, our Executive Vice President and Chief Scientific Officer, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 81,458 shares of the Company's common stock until February 12, 2025.
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Name | John Desjarlais | |
Title | Executive Vice President and Chief Scientific Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 14, 2024 | |
Expiration Date | February 12, 2025 | |
Arrangement Duration | 243 days | |
Aggregate Available | 81,458 | 81,458 |
Ellen Feigal [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 28, 2024, Ellen Feigal, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 5,496 shares of the Company's common stock until June 27, 2025.
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Name | Ellen Feigal | |
Title | Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 28, 2024 | |
Expiration Date | June 27, 2025 | |
Arrangement Duration | 364 days | |
Aggregate Available | 5,496 | 5,496 |
Kevin Gorman [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 28, 2024, Kevin Gorman, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 5,827 shares of the Company's common stock until June 30, 2025.
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Name | Kevin Gorman | |
Title | Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 28, 2024 | |
Expiration Date | June 30, 2025 | |
Arrangement Duration | 367 days | |
Aggregate Available | 5,827 | 5,827 |
Kurt Gustafson [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 28, 2024, Kurt Gustafson, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 5,496 shares of the Company's common stock until June 27, 2025.
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Name | Kurt Gustafson | |
Title | Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 28, 2024 | |
Expiration Date | June 27, 2025 | |
Arrangement Duration | 364 days | |
Aggregate Available | 5,496 | 5,496 |
Dagmar Rosa-Bjorkesen [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 28, 2024, Dagmar Rosa-Bjorkeson, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 5,496 shares of the Company's common stock until June 27, 2025.
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Name | Dagmar Rosa-Bjorkeson | |
Title | Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 28, 2024 | |
Expiration Date | June 27, 2025 | |
Arrangement Duration | 364 days | |
Aggregate Available | 5,496 | 5,496 |
Richard Ranieri [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On May 23, 2024, Richard Ranieri, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 15,000 shares of the Company's common stock until May 16, 2025, and it was terminated on June 27, 2024. On June 28, 2024, he adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 20,496 shares of the Company's common stock until June 27, 2025.
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Name | Richard Ranieri | |
Title | Board of Directors | |
Arrangement Duration | 358 days | |
A. Bruce Montgomery [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 27, 2024, A Bruce Montgomery, a member of our Board of Directors, terminated a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) entered on August 7, 2023. On June 28, 2024, he adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 26,568 shares of the Company's common stock until June 27, 2025.
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Name | A Bruce Montgomery | |
Title | Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 28, 2024 | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | June 27, 2024 | |
Expiration Date | June 27, 2025 | |
Arrangement Duration | 364 days | |
Aggregate Available | 26,568 | 26,568 |
Richard Ranieri May 2024 Plan [Member] | Richard Ranieri [Member] | ||
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | May 23, 2024 | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | June 27, 2024 | |
Expiration Date | May 16, 2025 | |
Aggregate Available | 15,000 | 15,000 |
Richard Ranieri June 2024 Plan [Member] | Richard Ranieri [Member] | ||
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 28, 2024 | |
Expiration Date | June 27, 2025 | |
Aggregate Available | 20,496 | 20,496 |
Summary of Significant Accounting Policies (Polices) |
6 Months Ended |
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Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of consolidated interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the consolidated interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited consolidated interim financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 29, 2024.
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Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Xencor, Inc. and Gale Therapeutics Inc. (Gale), a variable interest entity (VIE) in which we are the primary beneficiary. Since we own less than 100% of Gale, the Company records net loss attributable to non-controlling interests in its consolidated statements of loss equal to the percentage of the economic or ownership interests retained in Gale by the non-controlling party. In determining whether we are the primary beneficiary of a VIE, we apply a qualitative approach that determines whether we have (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses of, or the right to receive benefits from the VIE that could potentially be significant to the VIE. We continuously assess whether we are the primary beneficiary of Gale as changes to existing relationships or future transactions may result in us consolidating or deconsolidating Gale.
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Use of Estimates | Use of Estimates The preparation of consolidated interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive income (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, evaluation of intangible assets, investments, leases and other assets for evidence of impairment, fair value measurements, and contingencies. Significant estimates in these consolidated interim financial statements include estimates made for royalty revenue, accrued research and development expenses, stock-based compensation expenses, intangible assets, incremental borrowing rate for right-of-use asset and lease liability, estimated standalone selling price of performance obligations, estimated time for completing delivery of performance obligations under certain arrangements, the likelihood of recognizing variable consideration, the carrying value of equity instruments without a readily determinable fair value, and recoverability of deferred tax assets.
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Reclassifications | Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified to conform to the current period's presentation. These reclassifications did not affect the prior period's total assets, liabilities, stockholders' equity, net loss or cash flows. During the six months ended June 30, 2024, we adopted a change in presentation on our consolidated statements of loss to include loss from disposal of fixed assets in operating expenses. The prior period has been revised to reflect this change in the presentation.
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Intangible Assets | Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There was no impairment charge recorded for the three and six months ended June 30, 2024 and 2023. The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. We abandoned $0.4 million and $0.8 million of in-process intangible assets for the three and six months ended June 30, 2024. We abandoned $0.3 million and $0.6 million of in-process intangible assets during the three and six months ended June 30, 2023.
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Marketable Debt and Equity Securities | Marketable Debt and Equity Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and concentration and diversification. The investment policy limits the maturity of any individual security to a maximum of 36 months. The average maturity of securities in the portfolio as of June 30, 2024 is less than 12 months. The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions. The Company considers its marketable debt securities to be available-for-sale because it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost. These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss). There were no impairment losses or recoveries recorded for the three and six months ended June 30, 2024 and 2023. Accrued interest on marketable debt securities is included in the marketable securities’ carrying value. Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis. During the three and six months ended June 30, 2024, the Company recorded an unrealized loss of $0.5 million and $1.9 million in its portfolio of marketable debt securities. During the three and six months ended June 30, 2023, the Company recorded an unrealized gain of $1.8 million and $5.1 million. The unrealized loss is due to the changing interest rate environment and is not due to changes in the credit quality of the underlying securities. The unrealized gain (loss) is recorded in other comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023. The Company receives equity securities in connection with certain licensing transactions with its partners. These investments in equity securities are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For equity securities with a readily determinable fair value, the Company remeasures these equity investments at each reporting period until such time that the investment is sold or disposed. If the Company sells an investment, any realized gain or loss on the sale of the securities will be recognized within other income (expense) in the consolidated statements of loss in the period of sale. The Company also has investments in equity securities without a readily determinable fair value, where the Company elects the measurement alternative to record the investment at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There was an impairment charge of $20.4 million recorded for the six months ended June 30, 2024 in connection with equity securities without a readily determinable fair value. There was no impairment charge recorded for the three and six months ended June 30, 2023.
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Liability Related to the Sale of Future Revenues and Non-Cash Interest Expense on the Liability Related to the Sale of Future Royalties and Deferred Income Related to the Sale of Future Revenues | Liability Related to the Sale of Future Revenues We treat the sale of future Monjuvi royalties as debt, amortized under the effective interest rate method over the estimated life of the Monjuvi Royalty Sale Agreement. See Note 11. The amortization of the liability related to the sale of future Monjuvi royalties is based on our current estimate of future royalty payments. Royalty revenue will be recognized as earned and the payments made will be a reduction of the liability when paid. Non-cash Interest Expense on the Liability Related to the Sale of Future Royalties The total expected royalty payments less the net proceeds received are recorded as non-cash interest expense over the life of the liability. Interest is imputed on the unamortized portion using the effective interest method and is recorded based on the timing of the payments received over the term of the Monjuvi Royalty Sale Agreement. The actual interest rate will be affected by the timing of the royalty payments and changes in the forecasted revenue. Deferred Income Related to the Sale of Future Revenues We treat the sale of future Ultomiris royalties as deferred income, amortized under the units-of-revenue method by computing a ratio of the proceeds received to the total expected payments over the term of the Ultomiris Royalty Sale Agreement. See Note 11. The amortization of the liability related to the sale of future royalties is based on our current estimate of future royalty payments. Royalty revenue will be recognized as earned and the payments made will be a reduction of the liability when paid.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements There have been no material changes in recently issued or adopted accounting standards from those disclosed in the Company's 2023 Annual Report on Form 10-K. The Company has reviewed all recently issued accounting pronouncements and does not believe they will have a material impact on our results of operations, financial condition or cash flows. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2023 Annual Report on Form 10-K.
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Fair Value Measurement | Financial instruments included in the financial statements include cash and cash equivalents, marketable debt and equity securities, accounts receivable, accounts payable, and accrued expenses. Marketable debt securities, equity securities, and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short-term maturities. The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements. The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities. Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity – e.g., determining an appropriate discount factor for illiquidity associated with a given security. The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date.Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. During the three and six months ended June 30, 2024 and 2023, there were no transfers between Level 1 and Level 2.
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Recorded at Fair Value | The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):
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Net Loss Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Loss per Common Share | Basic and diluted net loss per common share is computed as follows:
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Marketable Debt and Equity Securities (Tables) |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The Company’s marketable debt securities held as of June 30, 2024 and December 31, 2023 are summarized below:
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Schedule of Maturities of Marketable Securities | The maturities of the Company’s marketable debt securities as of June 30, 2024 are as follows:
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Schedule of Unrealized Losses on Available-for-Sale Investments | The unrealized losses on available-for-sale investments and their related fair values as of June 30, 2024 and December 31, 2023 are as follows:
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Schedule of Equity Securities with Readily Determinable Fair Value | Equity securities with a readily determinable fair value, which are categorized as Level 1 in the fair value hierarchy under ASC 820, and their fair values (in thousands) as of June 30, 2024 and December 31, 2023 are as follows:
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Schedule of Net Gains and Losses | Below is a reconciliation of net gain (loss) recorded on equity securities during the three and six months ended June 30, 2024 and 2023:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Securities Without Readily Determinable Fair Value | Equity securities without a readily determinable fair value and their carrying values (in thousands) as of June 30, 2024 and December 31, 2023 are as follows:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Total Employee, Director and Non-Employee Stock-Based Compensation Expense Recognized | Total employee, director and non-employee stock-based compensation expense recognized for the three and six months ended June 30, 2024 and 2023 are as follows (in thousands):
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Summary of Stock Option Activity | The following table summarizes option activity under our stock plans and related information:
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Schedule of Weighted Average Assumptions Used for Estimation of Fair Value of Stock Options | We estimated the fair value of each equity award, including stock options and shares issued under our ESPP, using the Black-Scholes option-pricing model based on the date of grant of such stock option or ESPP share issuance date, with the following weighted average assumptions for the three and six months ended June 30, 2024 and 2023:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Assumptions Used for Estimation of Fair Value of ESPP |
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Summary of Restricted Stock Unit Activity | The following table summarizes the RSU activity for the six-month period ended June 30, 2024:
|
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Liabilities Maturities | The following table reconciles the undiscounted cash flows for the operating leases at June 30, 2024 to the operating lease liabilities recorded on the balance sheet (in thousands):
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Summary of Lease Costs and Cash Disclosures | The following table summarizes lease costs and cash payments for the three and six months ended June 30, 2024 and 2023 (in thousands):
|
Collaboration and Licensing Agreements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaboration and Licensing Agreements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Licensees | The revenues recorded for the three and six months ended June 30, 2024 and 2023 were earned principally from the following licensees (in millions):
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Schedule of Disaggregation of Revenue | The table below summarizes the disaggregation of revenue recorded for the three and six months ended June 30, 2024 and 2023 (in millions):
|
Sales of Future Royalties (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt of Future Royalties | The following table shows the activity within debt for the six months ended June 30, 2024 (in thousands):
|
Summary of Significant Accounting Policies (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Patents, licenses, and other intangible assets | ||||
Impairment of intangible assets | $ 0 | $ 0 | $ 0 | $ 0 |
Abandonment of capitalized intangible assets | 784,000 | 594,000 | ||
Impairment loss or recoveries | 0 | 0 | 0 | 0 |
Net unrealized gain (loss) on marketable securities | (500,000) | 1,800,000 | (1,900,000) | 5,100,000 |
Impairment on equity securities | (220,000) | 0 | 20,430,000 | 0 |
In-process intangible assets | ||||
Patents, licenses, and other intangible assets | ||||
Abandonment of capitalized intangible assets | $ 400,000 | $ 300,000 | $ 800,000 | $ 600,000 |
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Numerator: | ||||
Net loss attributable to Xencor, Inc. | $ (65,963) | $ (21,954) | $ (133,996) | $ (82,717) |
Denominator: | ||||
Weighted-average common shares outstanding used in computing basic net loss (in shares) | 61,676,444 | 59,807,558 | 61,444,384 | 59,922,784 |
Weighted-average common shares outstanding used in computing diluted net loss (in shares) | 61,676,444 | 59,807,558 | 61,444,384 | 59,922,784 |
Basic net loss per common share attributable to Xencor, Inc. (in dollars per share) | $ (1.07) | $ (0.37) | $ (2.18) | $ (1.38) |
Diluted net loss per common share attributable to Xencor, Inc. (in dollars per share) | $ (1.07) | $ (0.37) | $ (2.18) | $ (1.38) |
Marketable Debt and Equity Securities - Maturities (Details) $ in Thousands |
Jun. 30, 2024
USD ($)
|
---|---|
Amortized Cost | |
Mature in one year or less | $ 449,715 |
Mature within two years | 105,160 |
Amortized Cost | 554,875 |
Estimated Fair Value | |
Mature in one year or less | 449,372 |
Mature within two years | 104,862 |
Estimated Fair Value | $ 554,234 |
Marketable Debt and Equity Securities - Unrealized Losses (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Schedule of Available-for-sale Securities | ||
Fair value, less than 12 months | $ 365,198 | $ 74,619 |
Unrealized losses, Less than 12 months | (349) | (77) |
Fair value, 12 months or greater | 91,373 | 0 |
Unrealized losses, 12 months or greater | (304) | 0 |
Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value, less than 12 months | 119,044 | 8,073 |
Unrealized losses, Less than 12 months | (217) | (1) |
Fair value, 12 months or greater | 11,895 | 0 |
Unrealized losses, 12 months or greater | (62) | 0 |
Government Securities | ||
Schedule of Available-for-sale Securities | ||
Fair value, less than 12 months | 246,154 | 66,546 |
Unrealized losses, Less than 12 months | (132) | (76) |
Fair value, 12 months or greater | 79,478 | 0 |
Unrealized losses, 12 months or greater | $ (242) | $ 0 |
Marketable Debt and Equity Securities - Equity Securities with Readily Determinable Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Equity Securities | |||||
Net gain (loss) recorded on equity securities | $ (12,027) | $ 288 | $ (9,702) | $ (2,610) | |
Equity securities with readily determinable fair value | 28,271 | 28,271 | $ 42,210 | ||
Common Stock | |||||
Equity Securities | |||||
Equity securities with readily determinable fair value | 28,271 | 28,271 | 42,210 | ||
Astria | Common Stock | |||||
Equity Securities | |||||
Equity securities with readily determinable fair value | 2,311 | 2,311 | 5,360 | ||
INmune | Common Stock | |||||
Equity Securities | |||||
Equity securities with readily determinable fair value | 16,630 | 16,630 | 21,231 | ||
Viridian | Common Stock | |||||
Equity Securities | |||||
Equity securities with readily determinable fair value | $ 9,330 | $ 9,330 | $ 15,619 |
Marketable Debt and Equity Securities - Net Gains and Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Marketable Securities [Abstract] | ||||
Net gain (loss) recorded on equity securities | $ (12,027) | $ 288 | $ (9,702) | $ (2,610) |
Less: Net gain (loss) recorded on sale of equity securities | (2,012) | 0 | 827 | 0 |
Unrealized gain (loss) recorded on equity securities held at the reporting date | $ (10,015) | $ 288 | $ (10,529) | $ (2,610) |
Marketable Debt and Equity Securities - Equity Securities without Readily Determinable Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Equity securities without readily determinable fair value | |||||
Impairment on equity securities | $ (220) | $ 0 | $ 20,430 | $ 0 | |
Zenas | |||||
Equity securities without readily determinable fair value | |||||
Impairment on equity securities | 20,400 | ||||
Zenas | |||||
Equity securities without readily determinable fair value | |||||
Impairment on equity securities | $ 0 | 20,400 | $ 0 | ||
Preferred Stock | Zenas | |||||
Equity securities without readily determinable fair value | |||||
Equity shares estimated fair value | $ 43,780 | $ 43,780 | $ 64,210 |
Stock Based Compensation - Restricted Stock Units (Details) - RSUs |
6 Months Ended |
---|---|
Jun. 30, 2024
$ / shares
shares
| |
Restricted Stock Units | |
Beginning balance (in shares) | shares | 1,490,040 |
Granted (in shares) | shares | 959,071 |
Vested (in shares) | shares | (550,972) |
Forfeited (in shares) | shares | (119,483) |
Ending balance (in shares) | shares | 1,778,656 |
Weighted Average Grant Date Fair Value (Per unit) | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 30.66 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 22.58 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 31.72 |
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 29.80 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 26.02 |
Leases - Agreements (Details) $ in Thousands |
1 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 31, 2024
USD ($)
|
Jun. 30, 2021
phase
|
Sep. 30, 2026
USD ($)
|
Jun. 30, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Aug. 31, 2022
USD ($)
|
Aug. 01, 2022
USD ($)
|
|
Lessee, Lease, Description [Line Items] | |||||||
Payments for (proceeds from) tenant allowance | $ 700 | ||||||
Cash collateral for letters of credit | $ 384 | $ 380 | |||||
Letter of Credit | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Letter of credit amount | $ 400 | ||||||
Monrovia, CA - office and laboratory space | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Renewal term | 5 years | ||||||
Pasadena, CA - office and laboratory space | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Phases of lease term | phase | 2 | ||||||
Improvement allowance | $ 5,000 | $ 17,000 | |||||
Forecast | Pasadena, CA - office and laboratory space | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Improvement allowance | $ 3,300 |
Leases - Undiscounted Cash Flows (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Leases [Abstract] | ||
For the remainder of 2024 | $ 2,792 | |
2025 | 8,022 | |
2026 | 9,238 | |
2027 | 9,560 | |
2028 | 9,076 | |
2029 | 9,331 | |
Thereafter | 57,104 | |
Total undiscounted lease payments | 105,123 | |
Less: Tenant allowance | (3,252) | |
Less: Imputed interest | (33,453) | |
Present value of lease payments | 68,418 | |
Lease liabilities - short-term | 1,262 | $ 3,435 |
Lease liabilities - long-term | $ 67,156 | $ 59,025 |
Leases - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 1,881 | $ 2,020 | $ 3,762 | $ 4,200 |
Variable lease cost | 310 | 219 | 1,140 | 453 |
Total lease costs | 2,191 | 2,239 | 4,902 | 4,653 |
Cash paid for amounts included in the measurement of lease liabilities | $ 807 | $ 721 | $ 1,877 | $ 1,445 |
Remaining lease term | 10 years 8 months 12 days | 11 years 8 months 12 days | 10 years 8 months 12 days | 11 years 8 months 12 days |
Discount rate | 7.00% | 8.90% | 7.00% | 8.90% |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 117,000 | $ 0 | $ 117,000 | $ 0 |
Sales of Future Royalties - Narrative (Details) - Royalties $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2024
USD ($)
|
|
Alexion | Option and License agreement | ||
Sales of Future Royalties [Line Items] | ||
Non-cash revenue recognized | $ 6.9 | $ 16.3 |
Deferred revenue | 140.6 | |
MorphoSys | Collaboration and License Agreement | ||
Sales of Future Royalties [Line Items] | ||
Non-cash revenue recognized | $ 1.6 | $ 4.4 |
Interest rate | 17.50% | 17.50% |
Non-cash interest expense recognized | $ 0.8 | $ 1.9 |
Sales of Future Royalties - Debt of Future Royalties (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2024
USD ($)
| |
Sale of Future Royalty [Roll Forward] | |
Beginning balance of debt related to sale of future royalties | $ 20,974 |
Royalties owed to OMERS | 834 |
Royalties paid to OMERS | (4,448) |
Non-cash interest expense recognized | 1,900 |
Ending balance of debt related to sale of future royalties | 19,260 |
Debt - short-term | 6,947 |
Debt - long-term | 12,313 |
Total debt | $ 19,260 |
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