[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) [CEO Statement & Strategic Focus](index=1&type=section&id=CEO%20Statement%20%26%20Strategic%20Focus) Xencor is actively executing clinical studies for four wholly-owned XmAb® drug candidates across oncology and autoimmune diseases, with key programs progressing through dose-escalation and new Phase 2b studies initiated - Focus on execution of clinical studies for **four wholly-owned XmAb® drug candidates** in cancer and advanced autoimmune-driven diseases[2](index=2&type=chunk) - Oncology programs XmAb819 (ccRCC) and XmAb541 (CLDN6 solid tumors) are progressing through dose-escalation studies[2](index=2&type=chunk) - Initiated **Phase 2b XENITH-UC study** for XmAb942 (TL1A for IBD) and received regulatory authorization for plamotamab (CD20 B-cell depleting TCE) in rheumatoid arthritis[2](index=2&type=chunk) [Clinical Program Updates](index=1&type=section&id=Clinical%20Program%20Updates) [Oncology Programs](index=1&type=section&id=Oncology%20Programs) Xencor's oncology pipeline includes two T-cell engager bispecific antibodies, XmAb819 for clear cell renal cell carcinoma and XmAb541 for CLDN6-expressing solid tumors, both advancing through Phase 1 dose-escalation studies - XmAb819 (ENPP3 x CD3) is a first-in-class, tumor-targeted T-cell engager for advanced clear cell renal cell carcinoma (ccRCC). Initial dose-escalation data is planned for presentation in **Q4 2025**[3](index=3&type=chunk) - XmAb541 (CLDN6 x CD3) is a first-in-class, tumor-targeted T-cell engager for advanced solid tumors expressing CLDN6, with a Phase 1 dose-escalation study ongoing and target dose level characterization anticipated in **2025**[3](index=3&type=chunk) [Autoimmune & Inflammatory Disease Programs](index=2&type=section&id=Autoimmune%20%26%20Inflammatory%20Disease%20Programs) In autoimmune and inflammatory diseases, Xencor is advancing plamotamab for rheumatoid arthritis and XmAb942 for inflammatory bowel disease, with new study initiations and promising half-life data for XmAb942 - Plamotamab (CD20 x CD3), a B-cell depleting bispecific T-cell engager, received regulatory authorization in **June 2025** to proceed with a **Phase 1b/2a proof-of-concept study** for rheumatoid arthritis[7](index=7&type=chunk) - XmAb942 (Xtend™ anti-TL1A), an extended half-life antibody for inflammatory bowel disease, showed a **greater than 71-day half-life** in Phase 1, supporting **every 12-week dosing**. The global **Phase 2b XENITH-UC Study** for ulcerative colitis was recently initiated[7](index=7&type=chunk) - A proof-of-concept study for XmAb657 (CD19 B-cell depleting TCE) for autoimmune disease is on track to start **later in the year**[2](index=2&type=chunk) [Partnership & Corporate Developments](index=2&type=section&id=Partnership%20%26%20Corporate%20Developments) [Recent Partnership Developments](index=2&type=section&id=Recent%20Partnership%20Developments) Xencor received a $25 million regulatory milestone payment from Incyte following FDA approval of Monjuvi for relapsed or refractory follicular lymphoma, in addition to non-cash royalty revenue - Incyte announced FDA approval of Monjuvi for relapsed or refractory follicular lymphoma in **June 2025**[5](index=5&type=chunk) Milestone Payment (Q2 2025) | Item | Amount ($) | | :--- | :--- | | Regulatory Milestone Payment from Incyte | $25 million | - Xencor also earned non-cash royalty revenue from sales of Monjuvi®/Minjuvi® for **Q2 2025**[5](index=5&type=chunk) [Additional Corporate Updates](index=2&type=section&id=Additional%20Corporate%20Updates) Xencor appointed Dr. Raymond Deshaies to its board of directors, bringing extensive biotechnology and drug development experience. The company also provided financial guidance, projecting sufficient cash to fund operations into 2028 - Raymond Deshaies, Ph.D., a pioneering biochemist and cell biologist with over **25 years of experience**, was appointed to Xencor's board of directors in **July**[6](index=6&type=chunk) Financial Guidance (End of 2025) | Metric | Projected Amount ($ Millions) | | :--- | :--- | | Cash, cash equivalents and marketable debt securities | $555 million - $585 million | - Xencor expects to have cash to fund research and development programs and operations into **2028**[6](index=6&type=chunk) [Financial Results for the Second Quarter Ended June 30, 2025](index=2&type=section&id=Financial%20Results%20for%20the%20Second%20Quarter%20Ended%20June%2030%2C%202025) [Key Financial Highlights (Q2 2025)](index=2&type=section&id=Key%20Financial%20Highlights%20%28Q2%202025%29) Xencor reported a significant increase in revenue for Q2 2025, primarily driven by milestone payments, while managing R&D expenses and reducing G&A costs. The net loss decreased substantially compared to the prior year, partly due to unrealized gains from marketable equity securities Cash, Cash Equivalents and Marketable Debt Securities | Date | Amount ($ Millions) | | :--- | :--- | | June 30, 2025 | $663.8 | | December 31, 2024 | $706.7 | Revenue (Three Months Ended June 30) | Year | Amount ($ Millions) | | :--- | :--- | | 2025 | $43.6 | | 2024 | $23.9 | | **Change (YoY)** | **+82.4%** | Key Financials (Three Months Ended June 30) | Metric | Q2 2025 ($ Millions) | Q2 2024 ($ Millions) | Change (YoY) | | :--- | :--- | :--- | :--- | | Research and development expenses | $61.7 | $61.5 | +0.3% | | General and administrative expenses | $15.1 | $17.7 | -14.7% | | Other income (expense), net | $2.1 | $(13.4) | N/A (gain vs. loss) | | Net loss attributable to Xencor, Inc. | $(30.8) | $(67.3) | -54.2% | | Net loss per share (diluted) | $(0.41) | $(1.09) | -62.4% | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Selected Consolidated Balance Sheet Data](index=5&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Data) The selected consolidated balance sheet data shows a decrease in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, while total liabilities also decreased Selected Consolidated Balance Sheet Data (in thousands) | | June 30, 2025 (unaudited) ($ Thousands) | December 31, 2024 ($ Thousands) | | :--- | :--- | :--- | | Cash, cash equivalents and marketable debt securities - current | $403,426 | $449,846 | | Other current assets | 109,724 | 127,755 | | Marketable debt securities - long term | 260,399 | 256,833 | | Other long-term assets | 105,875 | 117,511 | | **Total assets** | **$879,424** | **$951,945** | | Total current liabilities | $96,083 | $87,432 | | Liabilities related to the sales of future royalties - long term | 94,736 | 115,159 | | Other long term liabilities | 68,254 | 75,328 | | **Total liabilities** | **259,073** | **277,919** | | **Total stockholders' equity** | **620,351** | **674,026** | | **Total liabilities and stockholders' equity** | **$879,424** | **$951,945** | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The consolidated statements of operations show a significant reduction in net loss for both the three and six months ended June 30, 2025, compared to the prior year, driven by increased revenue and improved other income (expense) Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) | | Three Months Ended June 30, | | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | | | 2025 (Unaudited) ($ Thousands) | 2024 ($ Thousands) | 2025 (Unaudited) ($ Thousands) | 2024 ($ Thousands) | | Revenue: Collaborations, milestones, and royalties | $43,608 | $23,907 | $76,340 | $39,904 | | Operating expenses: | | | | | | Research and development | 61,665 | 61,531 | 120,243 | 118,404 | | General and administrative | 15,115 | 17,746 | 32,452 | 31,533 | | **Total operating expenses** | **76,780** | **79,277** | **152,695** | **149,937** | | **Operating loss** | **(33,172)** | **(55,370)** | **(76,355)** | **(110,033)** | | Total other income (expense) | 2,097 | (13,412) | (2,985) | (32,865) | | Loss before income tax (benefit) expense and noncontrolling interest | (31,075) | (68,782) | (79,340) | (142,898) | | Income tax (benefit) expense | (250) | — | 117 | — | | Net loss including noncontrolling interest | (30,825) | (68,782) | (79,457) | (142,898) | | Net loss attributable to noncontrolling interest | — | (1,445) | (214) | (2,121) | | **Net loss attributable to Xencor, Inc.** | **$(30,825)** | **$(67,337)** | **$(79,243)** | **$(140,777)** | | Net loss per share attributable to Xencor, Inc. (basic and diluted) | $(0.41) | $(1.09) | $(1.07) | $(2.29) | | Weighted-average shares used in calculating (basic and diluted) | 74,278,872 | 61,676,444 | 73,974,715 | 61,444,384 | | Other comprehensive income (loss): | | | | | | Net unrealized (loss) gain on marketable debt securities | (97) | (498) | 921 | (1,942) | | Comprehensive loss | (30,922) | (69,280) | (78,536) | (144,840) | | Less: comprehensive loss attributable to the noncontrolling interest | — | (1,445) | (214) | (2,121) | | **Comprehensive loss attributable to Xencor, Inc.** | **$(30,922)** | **$(67,835)** | **$(78,322)** | **$(142,719)** | [Company Overview & Legal Disclosures](index=3&type=section&id=Company%20Overview%20%26%20Legal%20Disclosures) [About Xencor](index=3&type=section&id=About%20Xencor) Xencor is a clinical-stage biopharmaceutical company focused on developing engineered antibodies for cancer and autoimmune diseases, utilizing its proprietary XmAb® technology, with over 20 candidates in clinical development - Xencor is a clinical-stage biopharmaceutical company developing engineered antibodies for cancer and autoimmune diseases[13](index=13&type=chunk) - More than **20 candidates** engineered with Xencor's XmAb® technology are in clinical development, and multiple XmAb medicines are marketed by partners[13](index=13&type=chunk) - XmAb engineering technology enables small changes to a protein's structure, resulting in new mechanisms of therapeutic action[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a cautionary statement, highlighting that certain statements in the press release are forward-looking and subject to significant risks and uncertainties inherent in drug discovery, development, manufacturing, and commercialization, and should not be considered guarantees of future performance - Statements regarding clinical progress, data presentations, new candidates, clinical trials, and financial guidance are forward-looking[14](index=14&type=chunk) - Such statements are subject to significant known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[14](index=14&type=chunk) - Risks include those associated with drug development, regulatory approval, loss of key management, and factors described in SEC filings. Xencor undertakes no obligation to revise or update these statements[15](index=15&type=chunk) [Contact Information](index=6&type=section&id=Contact%20Information) [Investor and Media Contacts](index=6&type=section&id=Investor%20and%20Media%20Contacts) Contact information is provided for investor relations and media inquiries - Investor Contact: Charles Liles, cliles@xencor.com, **(626) 737-8118**[20](index=20&type=chunk) - Media Contact: Cassidy McClain, Inizio Evoke, cassidy.mcclain@inizioevoke.com, **(619) 694-6291**[20](index=20&type=chunk)

XmAb® Fc Domain Technology - Xencor's XmAb® Fc domains augment native immune functions, preserve half-life, stability and production of antibodies[4] - XmAb® Fc domains are 99.5% identical to natural antibodies and can be easily substituted into any antibody[9] - Xencor has over 500 issued and pending patents worldwide related to XmAb® Fc domains[4] Bispecific Antibody Pipeline - Xencor has 6 XmAb bispecific antibodies in Phase 1 clinical studies[4] - XmAb23104 (PD-1 x ICOS) entered Phase 1 in May 2019, and XmAb22841 (CTLA-4 x LAG-3) initiation was anticipated in Q2 2019[4,39] - Novartis has a co-development and ex-U.S license for XmAb14045 (CD123 x CD3)[4] - Amgen's AMG 424 (CD38 x CD3) is in Phase 1 study in myeloma, and AMG 509 (Undisclosed x CD3) is advancing in prostate cancer[4,11,44] IL-15 Cytokine Program - Genentech has a co-development collaboration with Xencor for novel IL-15 cytokines[4] - The collaboration includes $120 million upfront and up to $160 million in XmAb24306 development milestone payments, and up to $180 million for each new IL-15 program[42] - The first IND submission for XmAb24306 is planned for H2 2019[4,42] Clinical Programs and Partnerships - Xencor has 13 XmAb clinical programs ongoing internally or with partners, including tafasitamab/MOR208 (Morphosys) in Phase 3 and Ultomiris™ (Alexion) approved in the U.S for the treatment of adult patients with PNH[4,11] - In a Phase 1 study of XmAb14045 in relapsed/refractory AML, 28% of evaluable patients achieved either complete remission (CR) or CR with incomplete hematologic recovery (CRi) at 2 highest initial doses (1.3 and 2.3 mcg/kg weekly)[29,34] Financial Status - Xencor had $650.5 million in cash at March 31, 2019, providing runway beyond 2024[46]

Core Viewpoint - Xencor reported a quarterly loss of $0.66 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.63, but an improvement from a loss of $1.11 per share a year ago [1][2] Financial Performance - The company posted revenues of $32.73 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 48.38% and significantly up from $12.81 million in the same quarter last year [3] - Xencor has surpassed consensus revenue estimates three times over the last four quarters [3] Stock Performance - Xencor shares have declined approximately 63.2% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.67 on revenues of $18.77 million, and for the current fiscal year, it is -$2.92 on revenues of $81.09 million [8] - The trend of estimate revisions for Xencor is mixed, which could change following the recent earnings report [7] Industry Context - The Medical - Drugs industry, to which Xencor belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Xencor reported Q1 2025 revenues of $32.7 million and a net loss of $48.4 million, a significant improvement from the prior year, with total assets at $904.7 million [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $904.7 million as of March 31, 2025, primarily due to reduced marketable debt securities, while liabilities and equity also declined Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $39,675 | $40,875 | | Marketable debt securities (current & long-term) | $653,836 | $665,804 | | Total assets | $904,689 | $951,945 | | **Liabilities & Equity** | | | | Total liabilities | $264,815 | $277,919 | | Liabilities related to sales of future royalties | $154,379 | $163,606 | | Total stockholders' equity | $639,874 | $677,611 | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 revenues more than doubled to $32.7 million, narrowing the operating loss to $43.2 million and significantly improving net loss to $48.4 million Q1 2025 vs Q1 2024 Performance (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenue** | **$32,732** | **$15,997** | | Research and development | $58,578 | $56,873 | | General and administrative | $17,337 | $13,787 | | **Operating Loss** | **($43,183)** | **($54,663)** | | Asset impairment charges | ($4,865) | ($20,650) | | **Net Loss Attributable to Xencor** | **($48,418)** | **($73,440)** | | Net Loss Per Share (basic and diluted) | ($0.66) | ($1.20) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly decreased to $16.2 million in Q1 2025, resulting in a net decrease in cash of $1.3 million for the quarter Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($16,220) | ($56,859) | | Net cash provided by investing activities | $13,668 | $32,318 | | Net cash provided by financing activities | $1,249 | $1,787 | | **Net decrease in cash** | **($1,303)** | **($22,754)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail revenue recognition from collaborations, a $4.9 million asset impairment, the $154.4 million royalty liability, and ongoing patent litigation Q1 2025 Revenue by Partner (in thousands) | Partner | Revenue | Notes | | :--- | :--- | :--- | | Alexion | $15,469 | Non-cash royalty revenue for Ultomiris® | | Incyte | $15,263 | Includes $12.5M milestone and non-cash royalties for Monjuvi® | | Vir Bio | $2,000 | Milestone payment for tobevibart | | **Total** | **$32,732** | | - The company recorded a **$4.9 million** asset impairment charge in Q1 2025 related to its decision to pause further development of certain programs and reallocate resources[56](index=56&type=chunk) - In November 2023, the company sold rights to future royalties for Ultomiris and Monjuvi to OMERS. This transaction is accounted for as debt, with a remaining liability of **$154.4 million** as of March 31, 2025[59](index=59&type=chunk)[60](index=60&type=chunk)[64](index=64&type=chunk) - Xencor is a party to a patent infringement lawsuit initiated by Merus N.V. in August 2024. The company believes it has strong defenses but cannot guarantee a favorable outcome[66](index=66&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's clinical pipeline, significant Q1 2025 revenue increase driven by milestones, rising R&D expenses, and a strong liquidity position expected to fund operations into 2028 - The company's clinical pipeline is focused on advancing multiple drug candidates, including XmAb819 (renal cell carcinoma), XmAb541 (ovarian cancer), and XmAb942 (inflammatory bowel disease)[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) Q1 2025 vs Q1 2024 Operating Results (in thousands) | Category | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $32,732 | $15,997 | $16,735 | | R&D Expenses | $58,578 | $56,873 | $1,705 | | G&A Expenses | $17,337 | $13,787 | $3,550 | | Operating Loss | ($43,183) | ($54,663) | $11,480 | - The increase in revenue for Q1 2025 was primarily due to a **$12.5 million** milestone from Incyte and a **$2.0 million** milestone from Vir Bio[112](index=112&type=chunk)[115](index=115&type=chunk)[126](index=126&type=chunk) - As of March 31, 2025, the company had **$693.5 million** in cash, cash equivalents, and marketable debt securities and believes these resources will fund operations into 2028[134](index=134&type=chunk)[140](index=140&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in the company's exposure to market risk have occurred since the prior fiscal year-end - There have been no material changes in the Company's exposure to market risk from the end of the previous fiscal year[143](index=143&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of March 31, 2025, due to material weaknesses in accounting for royalties and tax legislation, with a remediation plan underway - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025[145](index=145&type=chunk) - The ineffectiveness was due to material weaknesses in controls related to accounting for the sale of future royalties (a non-routine transaction) and the evaluation of tax legislation[145](index=145&type=chunk) - Management has implemented a remediation plan that includes engaging third-party advisors for complex transactions and enhancing internal review processes[146](index=146&type=chunk)[147](index=147&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) Xencor is involved in a patent infringement lawsuit initiated by Merus N.V., asserting strong defenses against the allegations - Xencor is being sued by Merus N.V. for alleged patent infringement related to its antibody technologies[153](index=153&type=chunk) - Xencor has responded by filing a motion to dismiss and challenging the validity of the patents in question before the U.S. Patent and Trademark Appeal Board[153](index=153&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces increased risks from unfavorable global economic and political conditions, supply chain disruptions, and potential delays from government agency disruptions - The company's business is susceptible to unfavorable global economic conditions, political disruptions, and changes in international trade policy, which could strain suppliers and weaken demand[155](index=155&type=chunk)[156](index=156&type=chunk) - Disruptions at the FDA and other government agencies, caused by factors like budget issues or personnel shortages, could delay the review and approval of new products, negatively impacting the business[158](index=158&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is not applicable for the current reporting period - Not applicable[159](index=159&type=chunk) [Other Information](index=31&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated Rule 10b5-1 or other trading arrangements during the quarter[162](index=162&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents and officer certifications - Lists all exhibits filed with the report, including officer certifications (31.1, 31.2, 32.1) and iXBRL data files (101, 104)[163](index=163&type=chunk)

[First Quarter 2025 Financial Results and Business Update](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results%20and%20Business%20Update) Xencor reported strong Q1 2025 financial results, advanced key programs, and provided positive financial guidance [Key Highlights & Management Commentary](index=1&type=section&id=Key%20Highlights%20%26%20Management%20Commentary) Xencor reported positive XmAb942 Phase 1 results supporting 12-week dosing for Phase 2b, and announced a key executive transition - Interim Phase 1 results for XmAb942 (anti-TL1A) support a 12-week subcutaneous maintenance dosing regimen, a potential improvement over first-generation anti-TL1A antibodies[2](index=2&type=chunk)[3](index=3&type=chunk) - A Phase 2b study of XmAb942 in ulcerative colitis, named XENITH-UC, is on track to be initiated in the second half of **2025**[2](index=2&type=chunk)[3](index=3&type=chunk) - Nancy Valente, M.D., Chief Development Officer, will retire from her role and transition to a senior advisor position in June **2025**[2](index=2&type=chunk)[3](index=3&type=chunk) - The company plans to advance an XmAb TL1A x IL23p19 bispecific antibody candidate into Phase 1 trials in **2026**[3](index=3&type=chunk) [Recent Program Updates](index=1&type=section&id=Recent%20Program%20Updates) Xencor provided program updates, including XmAb942's Phase 1 data supporting 12-week dosing and advancing a novel bispecific antibody - **XmAb942 (Xtend™ TL1A):** Interim Phase 1 results from a dose-escalation study in healthy volunteers showed the antibody was well tolerated and has an estimated human half-life of over **71 days**[5](index=5&type=chunk) - The Phase 2b XENITH-UC study will be a randomized, double-blind, placebo-controlled trial in patients with moderate-to-severe ulcerative colitis[6](index=6&type=chunk) - **XmAb TL1A x IL23p19:** A bispecific antibody targeting two inflammatory pathways is in lead selection, with GMP production campaigns initiated. First-in-human studies are expected to begin in **2026**[6](index=6&type=chunk) [Recent Partnership Developments](index=2&type=section&id=Recent%20Partnership%20Developments) Xencor recognized **$12.5 million** from Incyte and **$2.0 million** from Vir Biotechnology in Q1 2025 from key partnership milestones - **Incyte Corporation:** Earned a **$12.5 million** regulatory milestone payment after the FDA accepted for review a supplemental BLA for tafasitamab in relapsed or refractory follicular lymphoma[11](index=11&type=chunk) - **Vir Biotechnology, Inc.:** Earned a **$2.0 million** development milestone payment following the initiation of a Phase 3 study of tobevibart (using XmAb Fc technologies) for chronic hepatitis delta[11](index=11&type=chunk) [Additional Corporate Updates & Financial Guidance](index=2&type=section&id=Additional%20Corporate%20Updates%20%26%20Financial%20Guidance) Xencor appointed a new board member and projected **$535 million to $585 million** cash by year-end 2025, funding operations into **2028** - In March, Todd Simpson, former CFO at Seagen, was appointed to Xencor's board of directors[8](index=8&type=chunk) - The company expects to end **2025** with cash, cash equivalents, and marketable debt securities between **$535 million** and **$585 million**[8](index=8&type=chunk) - The current cash position is anticipated to fund research and development programs and operations into **2028**[8](index=8&type=chunk) [Financial Results for the First Quarter Ended March 31, 2025](index=2&type=section&id=Financial%20Results%20for%20the%20First%20Quarter%20Ended%20March%2031%2C%202025) Xencor's Q1 2025 revenue more than doubled to **$32.7 million**, narrowing net loss to **$48.4 million**, and maintaining **$693.5 million** in cash First Quarter Financial Performance | Financial Metric | Q1 2025 ($M) | Q1 2024 ($M) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | 32.7 | 16.0 | +104.4 | | **R&D Expenses** | 58.6 | 56.9 | +3.0 | | **G&A Expenses** | 17.3 | 13.8 | +25.4 | | **Net Loss** | (48.4) | (73.4) | +34.1 (Loss Reduced) | | **Net Loss Per Share** | (0.66) | (1.20) | +45.0 (Loss Reduced) | Selected Balance Sheet Data | Balance Sheet Item | March 31, 2025 ($M) | December 31, 2024 ($M) | | :--- | :--- | :--- | | **Cash, cash equivalents and marketable debt securities** | 693.5 | 706.7 | - The increase in R&D expenses was primarily due to increased spending on XmAb819 (ENPP3 x CD3), XmAb541 (CLDN6 x CD3), and XmAb657 (CD19 x CD3) programs[12](index=12&type=chunk) - The decrease in 'Other expense, net' to **$5.1 million** from **$19.5 million** in Q1 2024 was primarily due to lower asset impairment charges[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The company's financial statements detail its balance sheet position and operational performance for the first quarter of 2025 [Selected Consolidated Balance Sheet Data](index=5&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Data) As of March 31, 2025, Xencor reported total assets of **$904.7 million**, liabilities of **$264.8 million**, and **$693.5 million** in cash and equivalents Selected Consolidated Balance Sheet Data (in thousands) | (in thousands) | March 31, 2025 (Unaudited, $ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Cash, cash equivalents and marketable debt securities** | 693,511 | 706,679 | | **Total assets** | 904,689 | 951,945 | | **Total liabilities** | 264,815 | 277,919 | | **Total stockholders' equity** | 639,874 | 674,026 | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2025, Xencor reported **$32.7 million** revenue, **$43.2 million** operating loss, and **$48.4 million** net loss, or **$(0.66)** per share Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended March 31, 2025 ($ thousands) | Three Months Ended March 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Revenue** | 32,732 | 15,997 | | **Total operating expenses** | 75,915 | 70,660 | | **Operating loss** | (43,183) | (54,663) | | **Net loss attributable to Xencor, Inc.** | (48,418) | (73,440) | | **Net loss per share (Basic and Diluted)** | (0.66) | (1.20) | | **Weighted-average shares outstanding** | 73,667,179 | 61,212,324 |

XmAb Technology and Pipeline - Xencor's XmAb platform is used to engineer antibodies with enhanced properties, focusing on oncology and autoimmune diseases[4, 9, 10] - The pipeline includes T-cell engagers and bispecific antibodies targeting various cancers and autoimmune conditions, such as IBD and rheumatoid arthritis[10, 11] - Key programs include XmAb942 (TL1A inhibitor) for IBD, Plamotamab (CD20xCD3) for rheumatoid arthritis, and XmAb819 (ENPP3 x CD3) for ccRCC[11, 12] XmAb942: Anti-TL1A Antibody for IBD - XmAb942 is designed for potent TL1A inhibition, convenient subcutaneous dosing, and extended half-life, potentially enabling Q12W maintenance dosing[31] - Phase 1 study in healthy volunteers showed a +71 day estimated half-life and dose-dependent increases in total TL1A, supporting less frequent dosing[31, 45] - Phase 1 data also showed rapid and sustained reduction of free sTL1A below the lower limit of quantification (LLOQ) for at least 16 weeks from a single dose[49] XmAb942 Clinical Development and Market Opportunity - A Phase 2 study (XENITH-UC) in ulcerative colitis is planned, with a design to maximize drug exposure and potentially achieve greater efficacy[56, 61] - The global IBD drug market is projected to exceed $23 billion by 2030, with anti-TL1A therapies expected to capture a significant portion[14, 74] - Gastroenterologist surveys indicate high expected utilization of anti-TL1A drugs, with approximately 9 out of 10 expecting to use them as first or second-line advanced therapy[74] XmAb TL1A x IL23 Bispecific Program - Xencor is developing XENP53***, a TL1A x IL23p19 bispecific antibody, with lead candidate selection and GMP production underway for a planned first-in-human study in 2026[11, 71] - Preclinical data suggests competitive functional potency for both TL1A and IL23 inhibition compared to other agents[69, 70] Financial Position - Xencor reported $706.7 million in cash, cash equivalents, and marketable debt securities as of December 31, 2024, supporting the development and expansion of the TL1A program[89]

Summary of Xencor (XNCR) Update / Briefing April 29, 2025 Company Overview - **Company**: Xencor (XNCR) - **Focus**: Development of protein engineering and drug molecules for unmet medical needs, particularly in oncology and immunology Key Industry Insights - **Industry**: Inflammatory Bowel Disease (IBD) treatment - **Current Market Need**: High unmet medical need in IBD, with existing medications achieving remission in only 10% to 20% of patients [7][8] - **Target Population**: Over 3 million individuals affected by IBD in the U.S. and Europe [7] Core Program Updates - **XmAb942**: A high potency, half-life extended anti-TL1A antibody - **Phase I Study Results**: Positive interim results indicating safety and pharmacokinetics [2][12] - **Half-Life**: Estimated at greater than 71 days, promising for convenient dosing [14] - **Dosing Schedule**: Planned Q12 week subcutaneous maintenance dosing [11][21] - **TL1A by IL-23 P19 Bispecific**: A lead candidate designed to combine two effective mechanisms of action for IBD treatment - **Development Timeline**: First in human studies expected in 2026 [58] Clinical Development Plans - **Phase II Study (ZENITH UC)**: - Focus on patients with moderately to severely active ulcerative colitis who have failed previous therapies [19][21] - Primary endpoint: Clinical remission based on modified Mayo Score at week twelve [21] - Expected to start in the second half of 2025 [61] Competitive Landscape - **Comparison with Competitors**: XmAb942 expected to provide higher drug exposure and better clinical outcomes compared to leading first-generation anti-TL1A drugs [60] - **Dosing Frequency**: Over 90% of surveyed gastroenterologists believe that XmAb942's Q12 week dosing could significantly improve patient compliance [61] Future Directions - **Combination Therapies**: Emphasis on developing a combination strategy with IL-23 and TL1A targeting to enhance efficacy [49][54] - **Market Positioning**: Xencor aims to position XmAb942 as a first or second line treatment option in advanced IBD therapy [60] Important Considerations - **Safety Profile**: No significant safety signals observed in Phase II data for competing therapies [31] - **Patient Compliance**: A more convenient dosing schedule is expected to improve patient quality of life and adherence to treatment [42][43] Conclusion - Xencor is advancing its pipeline with promising data for XmAb942 and a bispecific candidate targeting TL1A and IL-23, aiming to address significant unmet needs in IBD treatment while enhancing patient experience through improved dosing regimens and safety profiles [66]

Group 1 - Xencor (XNCR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3] - The Zacks rating system is based on changes in earnings estimates, which are tracked through a consensus measure from sell-side analysts, reflecting the company's earnings outlook [2][6] - The upgrade suggests that Xencor's improving earnings outlook could lead to increased buying pressure and a rise in stock price [3][5] Group 2 - The correlation between earnings estimate revisions and stock price movements is strong, particularly due to institutional investors who adjust their valuations based on these estimates [4][6] - Xencor is projected to earn -$2.87 per share for the fiscal year ending December 2025, representing a year-over-year change of 19.8%, with a 21.3% increase in the Zacks Consensus Estimate over the past three months [8] - The Zacks Rank system maintains a balanced distribution of ratings, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions [9][10]

Company Performance - Xencor reported a quarterly loss of $0.62 per share, which was better than the Zacks Consensus Estimate of a loss of $0.83, but worse than the loss of $0.31 per share from a year ago [1] - The quarterly report represented an earnings surprise of 25.30%, with the company previously expected to post a loss of $0.98 per share but actually reporting a loss of $0.71, resulting in a surprise of 27.55% [2] - Xencor's revenues for the quarter ended December 2024 were $52.79 million, exceeding the Zacks Consensus Estimate by 293.40%, compared to $44.69 million in the same quarter last year [3] Market Performance - Xencor shares have declined approximately 37.4% since the beginning of the year, while the S&P 500 has gained 1.3% [4] - The current consensus EPS estimate for the upcoming quarter is -$0.88 on revenues of $12.11 million, and for the current fiscal year, it is -$3.64 on revenues of $59.03 million [8] Industry Outlook - The Medical - Drugs industry, to which Xencor belongs, is currently ranked in the top 50% of over 250 Zacks industries, indicating that companies in this segment are expected to outperform those in the bottom 50% by a factor of more than 2 to 1 [9]

Drug Development and Clinical Trials - The company is focused on developing engineered antibody therapeutics for cancer and autoimmune diseases, advancing multiple drug candidates into clinical development[13]. - The XmAb 2+1 bispecific antibody format has shown potential in preclinical models, effectively targeting tumor cells while sparing normal cells[21]. - XmAb657 demonstrated over 99.98% reduction in B cells in non-human primate studies, with a half-life estimated at 15 days, indicating potential for durable B-cell depletion[23]. - The company plans to initiate a first-in-human study for XmAb657 in the second half of 2025[23]. - XmAb819 has shown initial evidence of anti-tumor activity in advanced clear cell renal cell carcinoma (ccRCC) patients, with some patients experiencing treatment durations extending beyond one year[33]. - XmAb541 is in a Phase 1 study for ovarian cancer, with the first patient dosed in April 2024[34]. - The company has paused further development of vudalimab to prioritize other pipeline programs, with safety data remaining consistent[38]. - New XmAb drug candidates, including XmAb942 and XmAb657, are being evaluated for autoimmune and inflammatory diseases[39]. - Plamotamab demonstrated encouraging clinical activity in heavily pretreated patients with advanced lymphoma, with patient enrollment in subcutaneous dose escalation cohorts completed in 2023[41]. - A Phase 1b/2a proof-of-concept study for plamotamab in rheumatoid arthritis (RA) is planned for the first half of 2025, with efficacy evaluated at week 12[42]. - XmAb7195 was reacquired in 2024, and development opportunities are being evaluated after being licensed to Aimmune Therapeutics in 2020[43]. - Xaluritamig showed a median overall survival of 17.7 months in a Phase 1 study for mCRPC, with a PSA90 rate of 45.1% observed in high-dose cohorts[50]. - Obexelimab is in a Phase 3 study for IgG4-related disease and Phase 2 studies for relapsing multiple sclerosis and systemic lupus erythematosus[51]. Financial Performance and Projections - The company has incurred significant losses since its inception and anticipates continuing to incur significant losses for the foreseeable future[168]. - For the year ended December 31, 2024, the company incurred a net loss of $232.6 million and had an accumulated deficit of $704.0 million[179]. - As of December 31, 2024, the company had $706.7 million in cash, cash equivalents, and marketable debt securities, which is expected to fund operations into 2028[184]. - The company anticipates incurring additional net losses in future years as it continues its research and development activities[180]. - The company expects its financial condition and operating results to fluctuate significantly from quarter to quarter and year to year due to various uncontrollable factors[172]. - The company may require additional financing to support its research and development programs, which could lead to dilution of existing shareholders[168]. - The company may require additional financing to complete the clinical development of its product candidates, which may not be available on favorable terms[186]. - The market price of the company's common stock is likely to be highly volatile, influenced by various factors including market conditions and operational performance[189]. - The trading price of the company's common stock has ranged from a low of approximately $5.75 to a high of approximately $58.345 since its IPO[188]. - Approximately 56.8% of the company's voting stock is owned by executive officers, directors, and significant stockholders, allowing them to exert significant control over corporate matters[191]. Regulatory and Compliance - Regulatory compliance is critical, with extensive requirements from the FDA and other authorities for drug development, including preclinical studies and clinical trials[105][106]. - The process for obtaining FDA approval involves multiple steps, including submission of a Biologics License Application (BLA) and compliance with Good Manufacturing Practices (GMP)[107][110]. - The FDA requires that all clinical trials conducted under an IND must meet specific requirements unless waived[113]. - Clinical trials are conducted in three phases, with Phase 1 focusing on safety and dosage, Phase 2 on efficacy and safety in a larger patient population, and Phase 3 on substantial evidence of clinical efficacy and safety[115]. - The standard FDA review process for a BLA is 10 months once accepted, but it can take longer depending on various factors[121]. - The FDA may require post-marketing studies to further assess drug safety and effectiveness, which can impact the commercial value of the product[125]. - Material changes in manufacturing processes post-approval may necessitate additional regulatory review and approval[121]. - Biologic product manufacturers must comply with comprehensive FDA regulations, including cGMP compliance and periodic reporting requirements[136]. - The company is subject to extensive regulations governing the development and commercialization of its products, which may complicate compliance efforts[163]. Intellectual Property and Market Position - The company aims to expand its patent portfolio to protect its proprietary Fc technologies and drug candidates[26]. - The company has filed patent applications for thousands of specific Fc domain variants, enhancing its intellectual property position[73]. - The patent expiration for key technologies includes bispecific (2034 U.S. and Ex-U.S.) and CD3 T-Cell Engagers (2035 U.S. and Ex-U.S.)[74]. - The company relies on third-party vendors for research, development, and clinical activities, maintaining flexibility in its infrastructure[80]. - The company has agreements with KBI Biopharma and WuXi Biologics for manufacturing and development services for its antibody candidates[81][88]. - The company is developing bispecific antibody drug candidates targeting solid tumor cells and B cells, competing with major companies like Amgen, Genmab, and Roche[101][102]. - The company is also working on antibody drug candidates targeting the cytokine TL1A for potential IBD treatment, facing competition from firms like Merck and Roche[103]. Workforce and Internal Controls - As of December 31, 2024, the company had 250 full-time employees, with 203 engaged in research and development activities[64]. - The workforce was 58% non-white and 59% women as of December 31, 2024, with women making up 30% of the senior leadership team[65]. - The company completed a reduction in force (RIF) affecting approximately 10% of the total employee headcount in January 2024[66]. - The company has identified material weaknesses in its internal control over financial reporting, which could affect the accuracy and timeliness of its financial reports[168]. - The company is subject to additional internal control requirements under the Sarbanes-Oxley Act of 2002 as a large accelerated filer[200]. Market and Economic Factors - The market size for the treatment of Crohn's disease and ulcerative colitis is projected to reach $40 billion worldwide by 2032[71]. - The American Cancer Society estimates approximately 2.0 million new cases of cancer and about 618,120 cancer deaths in the U.S. by 2025[69]. - Medical expenditures for cancer in the U.S. are projected to reach at least $245.6 billion by 2030[69]. - The company is susceptible to adverse impacts from inflation and economic volatility, which could affect its financial performance[175]. - Legislative and regulatory proposals aimed at healthcare cost containment could impact the company's ability to sell product candidates profitably[150]. Stock and Shareholder Matters - The company has never declared or paid any cash dividend on its common stock and does not anticipate doing so in the foreseeable future[205]. - The company is authorized to grant equity awards covering up to 18,367,000 shares of its common stock under its equity compensation plans[195]. - The company has options to purchase 12,370,081 shares outstanding under its equity compensation plans[195]. - The company may offer and sell shares of its common stock with an aggregate offering price of up to $200 million through an ATM Offering[198]. - No shares of common stock were sold pursuant to the ATM Offering from the date of the ATM Prospectus through December 31, 2024[198]. - Provisions in the company’s charter documents may make it more difficult for third parties to acquire the company, potentially affecting stockholder value[206].