XML 18 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Note 1 - Organization
9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.     Organization

 

XBiotech Inc. (XBiotech or the Company) was incorporated in Canada on March 22, 2005. XBiotech USA, Inc., a wholly-owned subsidiary of the Company, was incorporated in Delaware, United States in November 2007. XBiotech Switzerland AG, a wholly-owned subsidiary of the Company, was incorporated in Zug, Switzerland in August 2010. XBiotech Japan K.K., a wholly-owned subsidiary of the Company, was incorporated in Tokyo, Japan in March 2013. XBiotech Germany GmbH, a wholly-owned subsidiary of the Company, was incorporated in Germany in January 2014. The Company’s headquarters are located in Austin, Texas.

 

Since its inception, XBiotech has focused on advancing technology to rapidly identify and clone antibodies from individuals that have resistance to certain diseases and in turn create safe and effective therapies to treat these diseases. At the heart of the Company is a proprietary technical knowhow to translate natural human immunity into therapeutic product candidates. Additionally, the Company has built a framework for commercial manufacturing, using technology that required less capital, fewer operators and provided greater flexibility than standard industry practices.

 

Currently, the Company is developing new antibodies to replace a previous generation True Human anti-IL-1⍺ antibody that was sold in 2019. Under terms of the sale, XBiotech is permitted to pursue discovery of new True Human anti-IL-1⍺ antibodies for use in all areas of medicine with the exception of dermatology.

 

XBiotech’s scientists have discovered and characterized a panel of new anti-IL-1⍺ antibodies from a human donor and has cloned the genes for these antibodies into cells that can be used for production of novel therapeutics. The antibody products are planned to be used in human clinical trials in 2021 and ultimately commercialized. The Company’s Research and Development team has successfully engineered a cell-based production system for the first of its new anti-IL-1⍺ antibodies to enable the Company’s drug manufacturing process at its state-of-the-art facility in Austin, Texas, for which the Company has broken ground on an expansion project to accommodate future growth. The new antibody targets damaging inflammation by neutralizing interleukin-1alpha (IL-), an inflammatory substance produced by the body, which is involved in diseases such as cancer, arthritis and cardiovascular indications. With the right to pursue the discovery and development of new True Human™ antibodies targeting IL-1⍺ outside of dermatology, this product candidate is the first in a line of new therapies being developed at XBiotech which are planned to be pursued in major areas of medicine with unmet need.

 

The Company has developed and transferred screening technology to a blood donor organization that enables blood donors that have COVID-19 immunity to be identified. In the second quarter of 2020, XBiotech scientists searched and found a few ideal blood donors with strong natural immunity to COVID-19. During the third quarter XBiotech’s scientists used blood from these donors to identify and isolate antibody leads which are currently bring tested for efficacy against SARS-CoV-2. The Company is also working on cell line development of these leads.

 

The Company continues to be subject to a number of risks common to companies in similar stages of development. Principal among these risks are the uncertainties of technological innovations, dependence on key individuals, development of the same or similar technological innovations by the Company’s competitors and protection of proprietary technology. All of these risks are likely to be exacerbated by the outbreak of the novel strain of coronavirus, SARS-CoV-2 (“COVID-19”) and its ongoing impact, which has disrupted our business operations and will continue to do so. We cannot determine at this time the length or severity of these disruptions. The Company’s ability to fund its planned clinical operations, including completion of its planned trials, is expected to depend on the amount and timing of cash receipts from future collaboration or product sales and/or financing transactions. On December 30, 2019, the Company entered into a clinical manufacturing agreement and a clinical trial service agreement with Janssen Biotech Inc. The Company believes that its cash and cash equivalents of $238.4 million at September 30, 2020, as well as revenue generated from the Janssen contracts will enable the Company to achieve several major inflection points, including potential new clinical studies with our lead product candidate. We expect to have sufficient cash through two year from the report issuance date.